Do I need to pay unemployment taxes on Washington ESD benefits?

Oh no, I haven't gotten any 1099-G form 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 SecureAccess Washington account once it's available.

It depends on your total income for the year and tax bracket. Generally expect to pay around 12-22% in federal taxes on your unemployment benefits if you have no other major income.

thats like $2000+ i dont have laying around. this is a nightmare

Really? How do I set that up? I'm still filing weekly claims so maybe I can start doing this now.

When you file your weekly claim, there should be an option to withhold 10% for federal taxes. It's voluntary but definitely worth it if you can afford the smaller weekly amount.

I tried to set this up through my Washington ESD account but kept getting error messages. Had to call them to get it sorted out, but good luck getting through on the phone.

How much does something like that cost? I'm already tight on money.

Honestly the time it saved me was worth it. I had been trying to call Washington ESD for weeks about various issues and kept getting disconnected. This actually got me through to someone who could help.

Sounds like a scam to me. Why would you pay someone to make a phone call for you?

That's terrifying. How does the IRS payment plan work? Is there interest?

Yeah there's interest and penalties but it's better than not paying at all. You can set up a plan online at irs.gov. Just don't ignore it if you owe money.

how do i run the numbers? i have no idea how to figure this out

Use the IRS withholding calculator online or talk to a tax preparer. Many places offer free tax prep if your income is under a certain amount.

Good point about free tax prep. I'll look into that since my income this year has been pretty low overall.

No, that was only for tax year 2020. For 2024 and going forward, all unemployment benefits are fully taxable again.

Damn, that sucks. That exemption saved me a ton of money.

Totally agree. They send you all these pamphlets about job search requirements but nothing clear about taxes.

Exactly! And then we're all scrambling to figure it out at tax time.

If unemployment is your only income, you probably don't need to pay quarterly. But if you have other income or expect to owe more than $1,000, you should consider quarterly payments to avoid penalties.

Thanks, that makes sense. I'll probably just have taxes withheld from my remaining weekly claims.

Good reminder. I've been pretty bad about saving those weekly confirmation emails.

You can download most of this stuff from your Washington ESD account if you need to go back and get it.

That's actually really smart. I wish I had thought of this months ago but I can start doing it now.

easier said than done when youre barely making ends meet on unemployment

True, but even $10 a week is better than nothing and owing a big lump sum later.

Still sounds sketchy to me but I guess if it worked for you...

I was skeptical too but I was desperate to get my withholding fixed. The alternative was continuing to owe taxes I can't afford.

Simple in theory but nobody explains this when you first apply for benefits.

Fair point. The system definitely could do a better job of explaining the tax implications upfront.

Thanks for all the advice everyone. I feel a lot less panicked about this now and have a plan for moving forward.

Good luck! Tax season is stressful enough without the unemployment complications but you'll get through it.