Do I need to report ESD backpay on 2025 taxes if it was for 2024?
I'm completely confused about how to handle my taxes this year. I fought with ESD for months over a disqualification and FINALLY got my backpay of about $5,000 in January 2025, but the money was actually for weeks I claimed in 2024. I did choose to have taxes withheld when I originally filed my claim. Do I report this on my 2025 taxes (next year) or do I need to amend my 2024 taxes that I just filed last month? I've never dealt with unemployment taxes before and don't want to mess this up and get audited!
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Vera Visnjic
You report unemployment benefits in the year you actually received the money, not the year it was for. Since you got the $5,000 in January 2025, it will go on your 2025 tax return that you'll file in 2026. You should receive a 1099-G form from ESD in January 2026 showing this amount. You don't need to amend your 2024 taxes.
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Mason Lopez
•Thank you so much! That's a huge relief. I was worried I'd have to go through the hassle of amending my taxes. Do you know if the amount they withheld will be enough to cover the taxes I'll owe on it?
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Jake Sinclair
its always the year u actually get the $$ in ur bank acct that matters for taxes. doesnt matter what period the payment covers
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Brielle Johnson
•This is MOSTLY true but there are exceptions! I had a weird situation where ESD sent me a payment in December but it didn't actually hit my bank until January 2nd and they counted it on the PREVIOUS year's 1099-G. So sometimes it's when they issue it, not when you receive it. The tax system is never simple!
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Honorah King
I had this exact same situation last year! It's called "constructive receipt" in tax language. Basically, you report income in the year you have access to it, not when it was earned. So your backpay goes on 2025 taxes. But something to be aware of - the 10% withholding ESD takes might not be enough depending on your other income. I ended up owing more because the unemployment pushed me into a higher tax bracket when combined with my regular job income. Might want to set aside a bit extra just in case.
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Mason Lopez
•Oh that's a good point about the tax bracket! I didn't think about that. I'll definitely put some money aside to be safe. Better than getting a surprise tax bill next year.
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Oliver Brown
The ESD website is literally USELESS for tax questions. I've been trying to get someone on the phone for TWO WEEKS to ask about my 1099-G having the wrong amount on it and can't get through. My last year's backpay is showing up wrong and no one will help me!!!! I'm about to lose my mind with these people.
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Mary Bates
•If you're having trouble getting through to ESD on the phone, try using Claimyr (claimyr.com). I was stuck in the same situation with a tax document issue and they got me connected to an ESD agent in about 20 minutes when I'd been trying for days. They have a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3. Saved me so much frustration when I needed my tax documents corrected before filing.
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Clay blendedgen
Adding to what others have said - make sure to double-check the 1099-G you receive from ESD next January. They sometimes make mistakes with backpay situations. I had an issue where my backpay was counted twice (once when it was supposed to be paid and once when it actually got paid). Had to call and have them issue a corrected form. Also, if you're really concerned, you might consider making an estimated tax payment during 2025 to avoid any potential underpayment penalties next tax season, especially if the withholding amount might not be enough.
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Jake Sinclair
•this happened to me too!! the 1099 was totally wrong and i almost paid taxes twice on the same money. always check those forms!!!
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Oliver Brown
Does anyone know if this backpay means you have to report it on your FAFSA too? My kid is in college and I'm worried this will mess up her financial aid if I suddenly have $5000 more income when we fill out the FAFSA in October...
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Vera Visnjic
•Yes, unemployment compensation is considered income for FAFSA purposes. Since this payment was received in 2025, it would potentially impact the FAFSA for the 2026-2027 academic year (depending on which tax year they're using - the FAFSA rules have been changing). You might want to speak with your college's financial aid office about your specific situation and whether you can request a professional judgment review if this one-time payment significantly affects your aid eligibility.
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Brielle Johnson
I remember being so confused about this too! Everyone's right that it goes on the year you received it. But make sure you're setting enough aside for taxes. When I got backpay, I assumed the 10% withholding would cover it, but unemployment doesn't withhold for state taxes if your state has income tax. And yeah, it pushed me into a higher federal bracket too. Better to save too much than too little!
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Mason Lopez
•I'm in Washington so at least I don't have state income tax to worry about! Small blessing there. Thanks for the warning though - I'll definitely put aside more than I think I need just to be safe.
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