Do taxes come out of unemployment benefits from Washington ESD?

Washington ESD gives you the option to have federal taxes withheld from your weekly benefits. When you filed your initial claim, there should have been a question about tax withholding. If you chose yes, they take out 10% for federal taxes. State taxes aren't an issue since Washington doesn't have state income tax.

yeah they dont automatically take it out unless you tell them to. i learned this the hard way and owed like $800 at tax time last year

If you're having trouble accessing your eServices account to change the tax withholding, I'd recommend trying Claimyr (claimyr.com). They can help you get through to an actual Washington ESD agent who can make the change for you over the phone. There's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works. Way easier than trying to call the regular number and getting hung up on.

IMPORTANT: Unemployment benefits are considered taxable income by the IRS. You'll receive a 1099-G form from Washington ESD at the end of the year showing how much you received. Even if you have taxes withheld, you might still owe more depending on your total income for the year.

i never had taxes taken out and just saved 20% of every payment in a separate account. worked out fine for me

To clarify the process: Log into your Washington ESD eServices account → Go to 'Manage Claim' → Look for 'Tax Withholding' option → Select 'Yes' to have 10% federal tax withheld from future payments. This won't affect payments you've already received, only going forward.

Just remember that having taxes withheld is optional but highly recommended. The 10% federal withholding covers most people, but if you have other income or are married filing jointly, you might need to pay quarterly estimated taxes too.

Does anyone know if the tax withholding affects how much you get each week? Like if my weekly benefit is $400, would I get $360 with taxes taken out?

Pro tip: Even with tax withholding, keep track of all your unemployment payments throughout the year. Makes filing taxes much easier when you have your own records to compare against the 1099-G.

I tried to change my tax withholding online but kept getting error messages. Finally used that Claimyr service someone mentioned earlier and got it sorted out in like 10 minutes. The agent was able to update it right away.

Be aware that unemployment benefits can push you into a higher tax bracket if you also have other income during the year. The 10% withholding might not be enough in that case.

another thing to remember is that if you do owe taxes on your unemployment, you can usually set up a payment plan with the irs if you cant pay it all at once

Quick question - does the tax withholding start immediately or does it take a week or two to kick in after you change it?

I'm glad someone asked this question because I was wondering the same thing. Definitely going to have taxes withheld now that I understand how it works.

For anyone still having trouble reaching Washington ESD to make changes, I can't stress enough how much easier Claimyr makes the whole process. Instead of calling dozens of times and getting disconnected, they handle getting you connected to an actual person who can help.

One more tip: If you're planning to return to work soon, you might want to wait on having taxes withheld since you won't be on unemployment for long. But if you expect to be on it for several months, definitely have them withhold.

thanks everyone for all the helpful info! this is exactly what i needed to know about unemployment taxes

Don't forget that if you receive unemployment benefits in 2025, you'll get your 1099-G form in early 2026 for tax filing. Washington ESD usually mails them out in January.

Bottom line: Yes, unemployment is taxable income, but Washington ESD can withhold 10% federal tax if you request it. Highly recommend doing this to avoid owing money at tax time!