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

Yes, unemployment benefits are taxable income at the federal level. Washington state doesn't have income tax so you don't owe state taxes on it. You can have 10% withheld from your weekly payments through your Washington ESD account to avoid owing a lump sum later.

Yes, unemployment benefits are taxable income at the federal level. You'll get a 1099-G form from Washington ESD in January showing how much you received. You can choose to have 10% federal tax withheld from each payment when you file your weekly claims.

definitely taxable, learned this the hard way last year when I owed like $800 at tax time

I learned this the hard way last year - owed like $2000 in taxes because I didn't have anything withheld from my UI payments. Definitely recommend having the 10% taken out if you can afford it.

Washington state doesn't have income tax so you don't owe anything to the state, but federal taxes are definitely required. The 1099-G will show your total benefits for the year.

I always recommend having the taxes withheld automatically. 10% federal withholding covers most people's tax liability on UI benefits. You can change this setting anytime in your Washington ESD online account. Better to get a small refund than owe money.

If you're having trouble getting through to Washington ESD to change your tax withholding settings, I found this service called Claimyr that helped me get connected to an actual agent. They have a website at claimyr.com and there's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works. Made it so much easier than trying to call for hours.

I've been trying to call Washington ESD for weeks to ask about this exact thing but can never get through! Their phone lines are always busy or I get disconnected after waiting forever. So frustrating when you just need a quick answer.

The tax thing is so confusing! I thought government benefits weren't taxable but apparently unemployment is different from like welfare or food stamps. Why is the system so complicated??

wait so if i already got like 6 weeks of payments without withholding am i screwed?? how do i fix this

Wait, so if I'm getting $400 a week, I should expect to pay about $40 in taxes on that? Just trying to understand the math here.

The tax withholding option should be in your weekly claim questionnaire. It's usually near the end after the work search questions. You can also log into your Washington ESD account and change it in your profile settings.

I didn't withhold anything last year and ended up owing about $600 on $8000 in unemployment benefits. Definitely wish I had known to set up withholding from the start.

One thing to remember is that having 10% withheld might not be enough if you have other income or if you're in a higher tax bracket. You might want to talk to a tax professional about your specific situation.

The Washington ESD website has info about this but it's buried in like 10 different places. They really need to make tax information more prominent when people are filing their first claims.

Pro tip: if you can't reach Washington ESD by phone to ask about tax withholding, try using Claimyr. They specialize in getting through to ESD agents and can help you get answers about your specific situation. Way better than trying to navigate their phone system yourself.

The whole tax thing with unemployment is so confusing. Why can't they just make it not taxable like other assistance programs?

Just want to mention again that if anyone needs to actually talk to a Washington ESD agent about tax withholding or any other questions, Claimyr really does work. Saved me hours of trying to get through on the phone.

Does anyone know if the tax withholding affects your weekly benefit amount? Like if I'm supposed to get $350 but have 10% withheld, do I get $315?

UPDATE: I found the tax withholding option in my weekly claim and set it to 10%. Thanks everyone for the help! Hopefully this will save me from a big tax bill next year.

Don't forget to keep track of any job search expenses too. Some of those might be deductible on your taxes.

My tax preparer told me to keep all my 1099-G forms from Washington ESD because sometimes the amounts are wrong and you need to prove what you actually received.

If you're getting close to the maximum income for the year you might want to calculate whether the 10% withholding is enough. Sometimes it's not if you're in a higher bracket.

One more thing - if you do need to talk to Washington ESD about anything tax-related, I can't recommend Claimyr enough. The regular phone system is a nightmare but they actually got me connected to someone who could help.

Just remember that even though Washington doesn't have state income tax, you still need to report your unemployment on your federal return. The 1099-G makes it easy since it shows everything.

I'm so glad I found this thread. I was going to just ignore the tax thing and hope it worked out okay. Definitely setting up withholding now before I forget.

THE GOVERNMENT TAKES MONEY FROM YOU WHEN YOU'RE ALREADY DOWN AND OUT! First they make it impossible to find work that pays decent wages, then they tax you on the measly unemployment benefits. System is rigged!

Just want to add that you'll get a 1099-G form from Washington ESD at the end of the year showing how much you received in benefits. Keep this for your tax filing - you'll need it whether you had taxes withheld or not.

Been on unemployment twice in the past few years and always had the full 10% withheld. Never owed anything extra at tax time and usually got a small refund. Makes budgeting easier when you know what you're actually getting each week.

Quick question - if I start withholding taxes halfway through receiving benefits, does that mess anything up? I've already gotten like 6 weeks of payments without any withholding.

For anyone still having trouble reaching Washington ESD about tax questions, I recently used Claimyr and they got me connected in about 20 minutes. The agent was able to walk me through setting up withholding and answered all my tax questions. Much easier than the hours I spent trying to call myself.

This has been super helpful! I had no idea unemployment was taxable. Going to log into my Washington ESD account right now and set up the withholding. Thanks everyone!