Do I need to pay unemployment taxes on Washington ESD benefits?
Just realized I've been collecting unemployment for about 4 months now and haven't been setting aside money for taxes. I heard from someone that unemployment benefits are taxable income but I'm not sure if that's true for Washington state? The Washington ESD website doesn't make this super clear. Do I need to be saving money to pay taxes on my UI benefits when I file next year? Really stressed about this because I've been using every penny just to get by.
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Ethan Wilson
Yes, unemployment benefits are considered taxable income by the federal government, even in Washington state. You should have received a 1099-G form from Washington ESD showing the total amount you received. The good news is Washington has no state income tax, so you only owe federal taxes on it.
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Aisha Rahman
AuthorOh no, I haven't gotten any 1099-G form yet. When do they usually send those out?
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Ethan Wilson
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.
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Yuki Sato
wait what??? nobody told me this when i started collecting. ive been on UI for 6 months and spent everything on rent and food. how much do we usually owe??
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Carmen Flores
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.
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Yuki Sato
thats like $2000+ i dont have laying around. this is a nightmare
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Andre Dubois
Pro tip: You can actually have taxes withheld from your weekly unemployment payments if you're still collecting. Log into your Washington ESD account and look for the tax withholding option. I wish I had done this from the beginning instead of owing a huge chunk at tax time.
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Aisha Rahman
AuthorReally? How do I set that up? I'm still filing weekly claims so maybe I can start doing this now.
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Andre Dubois
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.
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CyberSamurai
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.
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Zoe Alexopoulos
Actually had success reaching Washington ESD about tax withholding issues using this service called Claimyr (claimyr.com). They help you get through to an actual agent instead of sitting on hold forever. There's a demo video that shows how it works: https://youtu.be/7DieNd3C7zQ. Was able to get my tax withholding set up in like 15 minutes after they connected me.
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Aisha Rahman
AuthorHow much does something like that cost? I'm already tight on money.
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Zoe Alexopoulos
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.
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Jamal Carter
Sounds like a scam to me. Why would you pay someone to make a phone call for you?
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Mei Liu
This is exactly why the unemployment system is broken. They don't tell you about the tax implications upfront and then people get hit with massive bills they can't afford. I owed $3,800 on my unemployment from last year and had to set up a payment plan with the IRS.
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Aisha Rahman
AuthorThat's terrifying. How does the IRS payment plan work? Is there interest?
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Mei Liu
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.
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Carmen Flores
Important clarification: While unemployment is federally taxable, you may qualify for the earned income tax credit or other credits that could reduce what you owe. Also, if your total income for the year is low enough, you might not owe much in taxes anyway. Don't panic until you actually run the numbers.
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Yuki Sato
how do i run the numbers? i have no idea how to figure this out
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Carmen Flores
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.
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Aisha Rahman
AuthorGood point about free tax prep. I'll look into that since my income this year has been pretty low overall.
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Liam O'Donnell
Does anyone know if the $10,200 unemployment tax exemption from 2020/2021 is still a thing? I keep seeing conflicting information online.
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Ethan Wilson
No, that was only for tax year 2020. For 2024 and going forward, all unemployment benefits are fully taxable again.
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Liam O'Donnell
Damn, that sucks. That exemption saved me a ton of money.
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Amara Nwosu
I'm in the same boat - been on unemployment since losing my job in August and just now thinking about taxes. The Washington ESD website really should make this more prominent. I had to dig through multiple pages to find any mention of tax implications.
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AstroExplorer
Totally agree. They send you all these pamphlets about job search requirements but nothing clear about taxes.
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Amara Nwosu
Exactly! And then we're all scrambling to figure it out at tax time.
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Giovanni Moretti
Quick question - do I need to pay quarterly taxes on unemployment or can I wait until I file my annual return? I've been getting mixed advice on this.
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Ethan Wilson
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.
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Giovanni Moretti
Thanks, that makes sense. I'll probably just have taxes withheld from my remaining weekly claims.
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Fatima Al-Farsi
PSA: Keep all your documentation! Save your weekly claim confirmations and any correspondence from Washington ESD. You'll need this stuff when you file taxes and it's a pain to track down later.
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Aisha Rahman
AuthorGood reminder. I've been pretty bad about saving those weekly confirmation emails.
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Dylan Cooper
You can download most of this stuff from your Washington ESD account if you need to go back and get it.
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Sofia Perez
Another option if you're worried about owing taxes - put a small amount aside each week when you get your unemployment payment. Even $20-30 per week adds up and makes tax time less stressful.
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Aisha Rahman
AuthorThat's actually really smart. I wish I had thought of this months ago but I can start doing it now.
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Dmitry Smirnov
easier said than done when youre barely making ends meet on unemployment
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Sofia Perez
True, but even $10 a week is better than nothing and owing a big lump sum later.
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CyberSamurai
Update on my earlier comment about getting through to Washington ESD - I ended up using that Claimyr service someone mentioned and they actually got me connected to resolve my tax withholding setup. Took about 20 minutes total including the call. Way better than the 3+ hours I spent on hold trying to call directly.
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Jamal Carter
Still sounds sketchy to me but I guess if it worked for you...
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CyberSamurai
I was skeptical too but I was desperate to get my withholding fixed. The alternative was continuing to owe taxes I can't afford.
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ElectricDreamer
For anyone still confused about this - yes you owe federal taxes on unemployment, no you don't owe Washington state taxes (since we don't have state income tax), and yes you should either have taxes withheld or save money for tax time. It's really that simple.
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Ava Johnson
Simple in theory but nobody explains this when you first apply for benefits.
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ElectricDreamer
Fair point. The system definitely could do a better job of explaining the tax implications upfront.
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Miguel Diaz
Just want to add - if you can't afford to pay your tax bill when you file, don't just ignore it. The IRS has payment plans and hardship programs. It's always better to communicate with them than to hope they forget about you.
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Aisha Rahman
AuthorThanks for all the advice everyone. I feel a lot less panicked about this now and have a plan for moving forward.
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Zainab Ahmed
Good luck! Tax season is stressful enough without the unemployment complications but you'll get through it.
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