Do you have to pay tax on unemployment - Washington ESD didn't take out enough

Ugh, so I'm probably going to owe like $2000+ then? Why doesn't Washington ESD warn people about this better?

Yeah it's a common surprise unfortunately. You can change your withholding amount anytime through your SecureAccess Washington account for future claims.

Did you have to set up a payment plan or were you able to pay it all at once?

had to do a payment plan, wasn't expecting to owe that much

I did get the 1099-G, that's what made me realize how little was withheld. Is there any way to avoid owing so much?

For this year's taxes, not really. But going forward you can request up to 22% federal withholding when filing weekly claims.

Wait, I thought you could only do 10%? I've been getting unemployment for 3 months and didn't know you could request more.

Never heard of Claimyr, is it legit? I've been trying to call Washington ESD for weeks about other issues.

Yeah it's real, they basically help you get through to ESD agents without waiting on hold forever. Worth checking out if you need to talk to someone about your claim.

I used them too when my claim got stuck in adjudication. Way better than trying to call the regular number.

I mean, it's pretty standard that government benefits are taxable. Social Security, unemployment, disability - they all count as income.

But they should make it clearer! Most people don't know this stuff and then get screwed at tax time.

Yeah I definitely rushed through the initial filing. Wish I'd paid more attention to that part.

The good news is you can change it for any future claims if you end up needing unemployment again.

Yes, you'll need to report that $8000 as income on your tax return. Whether you owe depends on your total income for the year and your tax bracket.

crap, nobody told me this when i filed for unemployment

Same boat here, got about $6000 with zero withholding. Really hoping I don't owe much.

Great, another penalty on top of already owing money. This keeps getting worse.

There are exceptions though - if your prior year tax liability was under a certain amount or if you paid at least 90% of current year taxes through withholdings/estimated payments.

How do you change the withholding amount? Is it in the weekly claim questions?

You can change it in your SecureAccess Washington account under the tax withholding section, or when you file your weekly claims there's a question about it.

Yeah they really should have a big warning about taxes when you first apply. Most people are already stressed about being unemployed and don't think about tax implications.

Agree, the whole UI system needs better education about the tax consequences.

Good to know, I'll definitely look into payment plans if I end up owing a lot.

You can set up payment plans online through the IRS website now, it's pretty straightforward.

How much does Claimyr cost? Is it worth it just for tax questions?

They don't charge much and it's way better than wasting entire days trying to get through on the phone. Check their site for current pricing.

Yeah my 1099-G is for 2024 benefits so I'll report it on my 2024 return. Thanks for clarifying that.

That's actually a good idea. I'll calculate roughly what I might owe and see if I can make a payment before filing.

You can make estimated payments online through EFTPS or by mailing a check with Form 1040ES.

Smart move! Better to have too much withheld and get a refund than owe money you don't have.

Exactly, I'd rather be safe than sorry after reading about everyone owing thousands.

I didn't know job search expenses could be deductible! I've spent quite a bit on gas driving to interviews.

Yeah, if you itemize deductions there are several job-hunting related expenses that qualify. Worth looking into.

Though with the higher standard deduction now, not as many people itemize anymore. Still worth calculating both ways.