Call ESD
Back to Washington Unemployment

Sophia Carson

Do employees pay federal unemployment tax on Washington ESD claims?

I'm confused about taxes on my unemployment benefits. I know I have to pay income tax on my Washington ESD payments, but someone told me there's also a federal unemployment tax that employees pay? I can't find anything about this on the ESD website. Does anyone know if this is true? I'm worried I'm missing something important for my taxes this year.

No, employees don't pay federal unemployment tax (FUTA). That's paid by employers only. You're thinking of income tax on your unemployment benefits, which is different.

0 coins

Oh thank goodness! I was panicking thinking I owed more money. So I just pay regular income tax on what Washington ESD paid me?

0 coins

Exactly. Unemployment benefits are taxable income, but there's no separate unemployment tax for employees.

0 coins

Yeah the person who told you that was wrong. FUTA is an employer tax, not employee. I learned this when I was doing payroll at my old job.

0 coins

That makes sense. I should have known better than to trust random advice from my neighbor lol

0 coins

Just to clarify for anyone reading this - employers pay FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act) on behalf of their employees. This is what funds unemployment insurance programs like Washington ESD. Employees never pay these taxes directly.

0 coins

This is super helpful! I always wondered how unemployment benefits were funded. So it comes from taxes that employers pay on our wages?

0 coins

Correct! In Washington, employers pay both federal and state unemployment taxes based on their payroll. The rates vary depending on the employer's experience with layoffs and claims.

0 coins

The only tax you need to worry about as someone receiving unemployment is income tax. Washington ESD should have given you the option to have federal taxes withheld from your weekly benefits. If you didn't do that, you'll owe when you file your return.

0 coins

I did have them withhold 10% for federal taxes. Was that enough or should I have done more?

0 coins

10% is usually sufficient for most people, but it depends on your total income for the year and tax bracket. You might want to check with a tax professional if you received a large amount in benefits.

0 coins

wait so if employers pay unemployment tax why do they fight unemployment claims so hard??? seems like they already paid for it

0 coins

Because their future tax rates are partially based on how many claims are filed against them. More claims = higher rates for that employer.

0 coins

ohhh that makes sense. so they have incentive to contest claims even if they're valid

0 coins

Exactly. It's called 'experience rating' - employers with more layoffs and claims pay higher unemployment tax rates.

0 coins

Thanks everyone! This really cleared things up. I was stressing about owing some mysterious unemployment tax that doesn't exist. Just regular income tax on the benefits.

0 coins

Glad we could help! Tax season is stressful enough without worrying about taxes that don't exist.

0 coins

Just wanted to add that Washington state has no state income tax, so you only need to worry about federal income tax on your unemployment benefits. Some states tax unemployment benefits at the state level too.

0 coins

Good point! I forgot about that advantage of living in Washington. No state income tax makes things simpler.

0 coins

Yeah my sister in Oregon has to pay state tax on her unemployment too. We're lucky here in Washington.

0 coins

For anyone who didn't have taxes withheld from their Washington ESD benefits, you might want to make quarterly estimated tax payments to avoid penalties. The IRS doesn't like waiting until April for their money.

0 coins

How do you calculate quarterly payments? I received about $8000 in unemployment last year but didn't have anything withheld.

0 coins

You can use IRS Form 1040ES to calculate estimated payments. Or just pay 25% of what you owe each quarter. Definitely consult a tax pro though.

0 coins

The confusion might come from the fact that some states have small employee contributions to disability insurance or family leave programs. But unemployment insurance is always employer-funded.

0 coins

Right, in Washington we have the WA Cares Act where employees pay a small amount for long-term care insurance. But that's completely separate from unemployment.

0 coins

OP you should double check your W-2 or pay stubs to see what taxes were actually taken out. You'll see Social Security, Medicare, federal income tax, but no unemployment tax deduction for employees.

0 coins

Good idea! I'll look at my last pay stub from before I got laid off. Thanks for all the help everyone.

0 coins

Related posts

Washington Unemployment Phone Number: Live Human Help
Which of the following payments are taxable for Washington ESD unemployment - confused about federal tax rules
Washington ESD unemployment benefits - are they taxable in WA state?
Is Washington ESD unemployment taxable - confused about tax implications
How much is unemployment tax taken from Washington ESD benefits?
Do I have to pay tax on unemployment Washington ESD benefits?
Washington ESD unemployment benefits taxable as income - confused about tax implications
Do unemployment benefits get taxed in Washington - confused about tax implications
Do I pay unemployment taxes on Washington ESD benefits?
Do u pay taxes on unemployment benefits from Washington ESD?
What taxes are taken out of unemployment benefits from Washington ESD?

Washington Unemployment AI

Expert Assistant
Secure

Powered by Claimyr AI

T
I
+
43,757 users helped today