Do I have to pay taxes on unemployment benefits from Washington ESD?

I don't remember seeing that option when I filed. How do I check what I selected or change it now?

Log into your Washington ESD account and look for 'Tax Withholding' under account settings. You can elect to have 10% withheld for federal taxes.

Thanks! Where do I find the option to have taxes withheld in my account?

When you file your weekly claim, there should be an option to change your tax withholding preferences. You can also call Washington ESD to set it up.

Don't panic! You can still set up withholding now, and you might want to start setting aside some money for taxes if you don't want withholding. Generally 10-22% is safe depending on your total income.

how much are we talking about here? if im getting $450 a week how much will i owe?

Ouch, that's exactly what I'm trying to avoid! Did you get a 1099-G form from Washington ESD?

Yeah, they send you a 1099-G in January showing how much you received. Mine was mailed but I think you can get it online through your ESD account too.

You can definitely get the 1099-G online. I had trouble reaching someone at Washington ESD on the phone to ask about mine, but found this service called Claimyr (claimyr.com) that helped me get through to an actual agent. They have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works.

You don't pay it 'back' - you just owe income tax on it like any other income. If you haven't had withholding, you might want to set aside about 10-12% of what you've received for taxes.

ok that's not as bad as I thought. can I still set up withholding now or is it too late?

You can change your withholding preference anytime through your weekly claim filing. Just look for the tax withholding section when you file your next weekly claim.

I had the same problem until I found this service called Claimyr. They actually got me connected to a Washington ESD agent within 20 minutes to resolve my tax withholding question. Check out claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works.

Thanks for clarifying! So I don't need to worry about state taxes, just federal?

Exactly. Washington state has no income tax, so unemployment benefits are only subject to federal income tax.

That's smart! I'm the same way with saving money. Better to have it taken out automatically.

Same here. I'd rather get a small refund than owe money. The 10% covers most of what you'll owe unless you're in a higher tax bracket.

Good point. I'm not working right now but plan to take some freelance work. Should I increase the withholding percentage?

Depends on how much freelance income you expect. You might want to make quarterly estimated tax payments instead of just relying on unemployment withholding.

Yikes! How much in benefits did you receive to owe $800?

I was on unemployment for about 6 months and received around $12,000 total. The exact amount you owe depends on your other income and tax bracket.

Do they mail this automatically or do you have to request it?

They should mail it automatically to your address on file, but you can also access it online through your Washington ESD account.

Never heard of that service. Does it actually work?

Yeah it worked great for me. They basically help you get through the phone system to reach a real person at Washington ESD. Way better than spending hours on hold.

I understand the frustration but unemployment benefits have always been taxable income. It's not new.

well they should make it more clear when people file! most people have no idea

That's really good advice. I should start doing that now while I remember the amounts.

You can also download your payment history from your Washington ESD account. It's under the payment information section I think.

Smart approach. I wish I had thought of that earlier in my claim.

It depends on how much was withheld and your total income for the year. Unemployment benefits are added to your other income, so you might need additional withholding to avoid owing money.

Got it, I'll probably set up withholding just to be safe then.

Right, it's treated just like wages for tax purposes. Same rates and everything.

Got it. So basically treat it like any other job income for tax planning.

Yeah I think I'm going to set up the withholding. Rather have less each week than a big bill later.

Smart choice. I've seen people owe thousands because they didn't plan ahead.

I'll check that out. Better to be over-prepared than under-prepared with taxes.

Good to know there are options if needed. Hopefully the withholding will cover it though.

The IRS is actually pretty reasonable about payment plans if you're proactive about it. It's when people ignore tax bills that things get messy.

Don't let tax concerns stop you from claiming benefits you're entitled to! Just plan ahead and you'll be fine.

Good plan! You'll be glad you did it when tax season rolls around.

And remember, if you ever need to talk to someone at Washington ESD about tax questions or anything else, Claimyr can help you get through to an agent. Saved me hours of frustration trying to call on my own.

How does that service work exactly? Do they just help you get through to ESD?

Yeah, they basically handle the calling process and connect you when an agent is available. Saved me hours of trying to call myself.

Thanks for the specific tax form info. That helps a lot.

With combined income putting you in a higher bracket, 10% might not be enough. You might want to consider having additional taxes withheld or setting aside extra money.

ugh this is so confusing. maybe i should talk to a tax person

Good point about penalties. I definitely don't want to deal with that on top of everything else.

I found it under 'Account Settings' then 'Tax Information' in my Washington ESD account.

That's a good idea. Do you remember which calculator you used?

I used the IRS withholding calculator on their website. It's pretty detailed but helpful.

That was only for 2020 tax year and part of 2021. Unemployment benefits are fully taxable again for 2024 and 2025.

Ah ok, thanks for clarifying. I was hoping that was still a thing!

Was the agent able to tell you exactly how much you should withhold based on your situation?

They couldn't give specific tax advice but they explained how the withholding works and helped me understand my options.

Thanks everyone for all the helpful info. I'm going to log in right now and set up the 10% withholding.