Do I have to pay federal unemployment tax on Washington ESD benefits?

Oh no, I haven't gotten any 1099-G yet. When do they usually send those out?

Washington ESD typically sends 1099-G forms by the end of January. You can also access it online through your eServices account.

That's exactly what I'm afraid of! How did you handle paying that much?

had to set up a payment plan with the IRS. wasn't fun but at least they work with you

Thank you! I'm going to log in right now and set that up. Better late than never I guess.

Wait, can you change the withholding amount or is it just a flat 10%?

It's a flat 10% for federal taxes. Washington state doesn't have income tax so there's no state withholding option.

Really? I've been trying to call them for weeks about different issues. How does that service work?

Basically they handle the calling and waiting for you, then connect you when an agent picks up. Super helpful when you have specific questions like tax withholding that need a real person to answer.

Sounds too good to be true. What's the catch?

I didn't have any other income this year since I've been unemployed since October. Does that help?

That definitely helps! With lower total income, your tax rate will be lower too. But still good to withhold something to be safe.

I agree it's frustrating, but at least Washington ESD makes it easy to set up withholding online once you know about it.

yeah i guess thats true just wish someone had told me earlier

That sounds complicated. Is the 10% withholding usually enough for most people?

For most people getting only unemployment benefits, 10% withholding should cover it. Quarterly payments are more for people with other income sources.

Yes! It's such a relief to know other people are in the same boat. Did you set up withholding yet?

Just did it after reading this thread. Took like 2 minutes on the Washington ESD website.

Oh that's good to know! So it's not as bad as regular paycheck taxes then?

Exactly! No FICA taxes on unemployment, just federal income tax. Makes the 10% withholding option pretty reasonable.

I mean, unemployment is income replacement, so it makes sense that it's taxed like income. At least we got the benefits when we needed them.

Fair point but still frustrating when you're already struggling financially

Good to know, but yeah my benefits are all from 2024 going into 2025 so that doesn't help me.

Right, just mentioning it in case anyone reading this is dealing with older tax returns.

That's smart! I wish I had thought of that from the beginning. Might start doing that with future payments too.

Yeah I do this too, treat it like a tax escrow account. Better to have too much saved than not enough.

That's roughly correct if your overall tax rate is around 10%. But your actual rate depends on your total income for the year, filing status, deductions, etc.

Makes sense. I'll probably just do the 10% withholding to be safe.

That's the second person to mention Claimyr. Might be worth checking out if I have other questions that need a real person.

I was skeptical about using a service like that but honestly the Washington ESD phone system is so backed up, sometimes you need help just getting through.

That's exactly where I want to be! Thanks for sharing your experience.

No problem! Just remember you can always adjust or stop the withholding if your situation changes.

Good to know as a backup plan. Hopefully the withholding will prevent me from needing that though.

Absolutely! Withholding is definitely the way to go if you can swing it.

Great plan! You'll thank yourself come tax season.

Smart move. Better to be over-prepared than caught off guard.

Good point! I'll start a folder for all my Washington ESD documents and tax stuff.

Exactly! The 1099-G will have most of what you need, but good record keeping never hurts.

Same here! I was feeling pretty panicked before but now I have a clear plan forward.

That's what these forums are for! We're all figuring this stuff out together.

Really? What kind of job search expenses count?

Things like resume services, job fair travel, interview travel, etc. Check with a tax professional though since the rules changed in recent years.