Do I pay tax on unemployment benefits in Washington - confused about IRS requirements

Oh no, I don't think I selected tax withholding when I filed. How do I change that setting now?

Log into your SecureAccess Washington account and look for the tax withholding option in your profile settings. It should be pretty straightforward to update.

Did you end up owing a lot when you filed taxes without withholding?

I owed about $800 on $6000 in benefits, but that was with other income too. It varies based on your total income for the year.

I was having the same problem until someone told me about claimyr.com - it's a service that helps you get through to Washington ESD agents. I used it last week and actually got connected within 20 minutes. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works. Game changer for me!

Is that legit? Sounds too good to be true with how impossible it is to reach them normally.

Yeah I was skeptical too but it actually worked. Much better than spending my whole day redialing the same number over and over.

When do they usually send out the 1099-G forms?

They're required to send them by January 31st, but sometimes it takes a few weeks to arrive in the mail.

I understand the frustration, but unemployment benefits are considered income replacement, which is why they're taxed like regular wages. The withholding option helps avoid a big surprise at tax time.

I guess that makes sense, but it still stings when you're barely getting by as it is.

How much extra would you recommend setting aside?

Maybe another 5-10% if you can manage it. Better to have a small refund than owe money you don't have.

No, Washington doesn't have state income tax so you only need to worry about federal taxes on your unemployment benefits.

That's a relief! One less thing to worry about.

Yikes, that's exactly what I'm afraid of. I'm definitely going to set up withholding as soon as I can get through to them.

That's why I mentioned Claimyr earlier - might be worth trying if you can't get through the normal way. Better to get it set up now than deal with a huge tax bill later.

How do I know if I need to make quarterly payments?

If you expect to owe more than $1000 in taxes, you should probably make quarterly payments. A tax professional can help you figure that out based on your situation.

Correct, just federal taxes since Washington has no state income tax. The IRS treats unemployment benefits as taxable income.

Thanks for clarifying. Sometimes these threads get confusing when people from different states chime in.

Really? I had no idea you could get earned income credit with unemployment.

Yeah, the rules changed a few years ago. If your total income including unemployment is still below certain thresholds, you might qualify.

I do some occasional freelance work. Do I need to report that every week even if it's just small amounts?

Yes, you need to report any work and earnings when you file your weekly claim, no matter how small. It affects your benefit amount and you'll need to pay taxes on that income too.

Good to know it's not complicated once I can actually access it!

Totally agree. They should make tax withholding the default option and let people opt out if they want to handle it themselves.

That would make so much more sense! Most people would prefer smaller weekly payments over a huge tax bill later.

That's really helpful to know. I think I'm going to try that if I can't get the online option to work.

Same here. At this point I'd rather pay a service than waste more days trying to get through on my own.

Good point. I should probably start a spreadsheet or something to track everything.

That's exactly what I do. Just a simple spreadsheet with dates, amounts, and any work income. Takes 5 minutes a week but saves hours at tax time.

Same boat! This thread has been really eye-opening. Glad I'm not the only one who was confused about this.

Happy to help! It's one of those things they don't explain very well when you first apply. Good luck getting your withholding set up.