Do you have to pay income tax on Washington ESD unemployment benefits?

Yes, unemployment benefits are considered taxable income by both federal and state governments. You'll receive a 1099-G form from Washington ESD showing your total benefits received for the year. The good news is you can request tax withholding.

I learned this the hard way last year - owed about $1,200 in taxes on my unemployment. Now I always have them withhold 10% federal and set aside extra for state taxes since Washington doesn't have income tax but you might owe other states if you moved.

The IRS treats unemployment the same as regular wages for tax purposes. At $487/week you're looking at about $12,600 if you collect for 6 months. Depending on your tax bracket, you could owe $1,500-3,000 in federal taxes alone.

I had trouble accessing my Washington ESD account to change my tax withholding settings. Kept getting error messages when I tried to update it. Finally used Claimyr to get through to someone at Washington ESD who helped me set it up over the phone. Much easier than fighting with the website. Here's their site: claimyr.com and they have a demo video at https://youtu.be/7DieNd3C7zQ

this is so confusing... i thought unemployment was like welfare or food stamps where you dont pay taxes??? why would they tax money they give you when you have no job??

Pro tip: if you're doing gig work or odd jobs while on unemployment, make sure you report ALL income to Washington ESD. That income is also taxable and if you don't report it properly, you could face overpayment issues AND tax problems.

The 1099-G form Washington ESD sends is super important for your taxes. Keep it safe! I lost mine last year and had to request a duplicate which delayed my tax filing. You can usually download it from your Washington ESD account too.

I'm a tax preparer and see this confusion every season. Yes unemployment is taxable but here's what many people don't know: if you had taxes withheld and your total income for the year is low enough, you might get most or all of it back as a refund. Don't panic about the taxes until you see your full tax picture.

WAIT hold up... I've been collecting unemployment for 4 months and nobody told me about taxes! I thought Washington state has no income tax so I figured I was good. This is a nightmare!

For anyone freaking out about this - you can make estimated quarterly tax payments to avoid a big bill at tax time. The IRS has a form 1040ES for estimated payments. But honestly, just starting tax withholding through Washington ESD is probably easier.

This whole tax thing is exactly why I tried calling Washington ESD to get clarification on my specific situation. After getting disconnected 3 times, I found this service called Claimyr that actually got me through to a real person. The agent explained everything about tax withholding and helped me set it up. Worth checking out if you're having trouble reaching Washington ESD directly.

Just to add some perspective - I collected unemployment for about 5 months last year, had no taxes withheld, and ended up owing about $900 in federal taxes. It sucked but wasn't the end of the world. I set up a payment plan with the IRS and paid it off over 6 months.

One thing that helped me was opening a separate savings account and transferring 15% of each unemployment payment into it for taxes. That way I wasn't tempted to spend the tax money and I actually had a little extra left over after filing.

Don't forget that if you move to a different state while collecting Washington ESD benefits, you might have to deal with that state's income tax too. I moved from Washington to California mid-year and had to figure out California taxes on my Washington unemployment. Such a headache.

For what it's worth, I had a really hard time navigating the tax withholding section of the Washington ESD website. The interface is confusing and I kept getting logged out. Eventually I used Claimyr to get help from an actual Washington ESD representative who walked me through the whole process over the phone. Much less frustrating than dealing with the website glitches.

Just want to confirm what others have said - unemployment benefits are definitely taxable income. I learned this in accounting class years ago but forgot until I had to file taxes after being unemployed. The 1099-G form makes it clear how much you received and you have to report it as income.

This thread has been super helpful! I had no idea about the tax implications when I started collecting. Going to log into my Washington ESD account right now and set up tax withholding. Better late than never!