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Emma Bianchi

Do you have to pay federal taxes on Washington ESD unemployment benefits?

I'm getting my first unemployment payments from Washington ESD and I'm confused about taxes. Do I need to pay federal taxes on these benefits? I heard conflicting info - some people say yes, others say no. I don't want to mess this up when tax season comes around. Should I have taxes withheld from my weekly claims or just pay later? Any advice would be helpful!

Yes, unemployment benefits are considered taxable income by the IRS. You'll receive a 1099-G form showing how much you received. You can choose to have 10% federal tax withheld when you file your weekly claims on the Washington ESD website.

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Thanks! How do I set up the withholding? Is it somewhere in my SecureAccess Washington account?

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When you file your weekly claim there's a question asking if you want federal taxes withheld. Just answer yes and they'll automatically deduct 10%.

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I learned this the hard way last year - owed like $800 in taxes because I didn't know unemployment was taxable! Definitely have them withhold the taxes, it's worth it to avoid a big bill later.

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Ouch, that's rough. I'm having the same issue trying to figure out Washington ESD tax stuff.

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You can also make quarterly estimated tax payments if you prefer to handle it yourself rather than having Washington ESD withhold.

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I've been trying to call Washington ESD for weeks to ask about this exact thing but can never get through. Their phone system is impossible - always busy or hangs up on me. Anyone else having trouble reaching them?

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Same problem here! I've called probably 50 times and never talked to a real person.

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Try using Claimyr.com - they help you get through to Washington ESD agents. I saw their demo video at https://youtu.be/7DieNd3C7zQ and it actually works. Finally talked to someone about my tax withholding question.

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For 2024 tax year, unemployment benefits are fully taxable at federal level. Washington state doesn't have income tax so no worries there. The 1099-G will show your total benefits in Box 1.

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Good to know about no state tax. So it's just federal I need to worry about?

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Correct, only federal taxes apply to unemployment benefits in Washington.

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wait so if I already got like $5000 in unemployment this year and didn't have taxes taken out am I screwed??

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You're not screwed but you should start having taxes withheld now and maybe set aside money for what you owe. $5000 could mean owing around $500-1000 depending on your tax bracket.

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ugh ok thanks. gonna change my withholding setting tomorrow

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The whole tax thing with unemployment is so confusing. During the pandemic they made some benefits tax-free but regular state unemployment was always taxable. People get mixed up because of that.

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Yeah that's probably where the confusion comes from. Those were special federal programs though, not regular state UI.

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That makes sense. I was wondering why I heard different things from different people.

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Pro tip: if you're working part-time while getting partial unemployment, make sure you're withholding from both your job AND your unemployment. Otherwise you might owe a lot.

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Good point. I'm doing part-time work and getting partial benefits. Need to check my withholding situation.

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Yes, partial unemployment benefits are taxable just like full benefits. The 10% withholding option applies to partial benefits too.

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Does anyone know if you can change the withholding amount? Like if 10% isn't enough can you have more taken out?

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Washington ESD only offers the standard 10% federal withholding option. If you need more withheld you'd have to make estimated tax payments separately.

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Got it, thanks. Might need to do quarterly payments then.

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I had to call Washington ESD about tax forms and couldn't get through for days. Finally used that Claimyr service someone mentioned - they got me connected in like 10 minutes. Worth it just to get answers.

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How much does Claimyr cost? I'm desperate to talk to someone at Washington ESD.

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They don't charge upfront or anything sketchy like that. Just helps you get through the phone system. Check out claimyr.com

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The 1099-G usually comes in January. Make sure Washington ESD has your current address or you might not get it. You can also access it online through your SecureAccess Washington account.

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Good reminder about the address. I moved recently and need to update that.

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You can update your address when you file your weekly claim or log into your account separately to change it.

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been getting unemployment for 6 months and just found out its taxable... this is gonna hurt at tax time

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Start having taxes withheld now and maybe set aside some money for what you'll owe. Better late than never!

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Same boat here. Wish they made it more obvious that unemployment is taxable income.

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For those asking about getting through to Washington ESD - I've had success with Claimyr too. They have some kind of system that helps you navigate the phone maze. Saved me hours of calling.

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Is it legit though? Sounds too good to be true with how impossible it is to reach Washington ESD normally.

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Yeah it's real. They have a demo video showing how it works. Nothing shady about it, just helps you get through faster.

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Remember unemployment benefits count toward your AGI so they could affect other tax credits or deductions you qualify for. Something to keep in mind when planning.

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I hadn't thought about that. Good point about it affecting other tax stuff.

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Yep, could impact things like earned income credit eligibility or education credits depending on your situation.

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If you're self-employed and getting unemployment, make sure you understand how it interacts with your business taxes too. Can get complicated.

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Good point. Self-employment adds another layer of complexity to the tax situation.

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Definitely recommend talking to a tax professional if you have self-employment income plus unemployment benefits.

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The bottom line is yes, unemployment is taxable income federally. Have the 10% withheld to avoid owing a bunch later. Learned from experience!

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Thanks everyone for all the helpful info. Definitely going to set up withholding on my next weekly claim.

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Smart move. Better to get a small refund than owe a big chunk in April.

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