Do you have to pay taxes for unemployment Washington ESD - confused about tax withholding

Yes, unemployment benefits are considered taxable income by the IRS. When you first filed your claim with Washington ESD, there should have been an option to have federal taxes withheld automatically. If you didn't select that, you'll need to make quarterly estimated payments or pay a lump sum when you file your tax return.

This is such a common mistake! I did the same thing my first time on unemployment. Washington state doesn't tax unemployment benefits, but the federal government definitely does. You'll get a 1099-G form from Washington ESD in January showing how much you received.

I had this same panic last year. The good news is you can log into your Washington ESD account right now and change your withholding preference for future payments. Look for the tax withholding section in your profile settings. I'd recommend having them take out 10% federal just to be safe.

Been there! I owed like $2,300 in taxes on my unemployment from 2023 because I was clueless about this. Now I always have taxes withheld. Pro tip: if you can't afford to pay quarterly estimates, at least try to save some money from each weekly claim for tax time.

this is why the system is so messed up, they should make it clearer that unemployment is taxable income. I bet tons of people get surprised by this every year

If you're really worried about the tax bill, you might want to talk to a tax professional. They can help you figure out if you need to make estimated payments for Q4 or if you can just handle it when you file your return. Depends on your total income for the year.

I actually got a refund last year even though I was on unemployment for 6 months. It really depends on your other income, deductions, and filing status. Don't panic until you actually do the math.

For what it's worth, you can also check claimyr.com if you need to get through to Washington ESD to change your tax withholding settings and can't get through on the phone. They have a service that helps you actually reach an agent instead of getting the busy signal all day. There's a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

The 1099-G will show your total benefits and any taxes that were withheld. Keep all your unemployment paperwork together for tax season. If you're doing your own taxes, make sure to enter the unemployment income correctly - it goes on the same line as your W-2 wages.

don't stress too much about it. worst case you owe some money and can set up a payment plan with the IRS if needed. they're pretty reasonable about payment plans especially if you're still looking for work

I learned this the hard way too. Now I always tell people - treat unemployment like any other job income for tax purposes. Set aside money from each payment if you're not having taxes withheld automatically.

Just wanted to add - if you had other jobs this year before going on unemployment, you might have already had enough taxes withheld from those paychecks to cover the unemployment taxes too. Check your last paystub to see your year-to-date withholdings.

The Washington ESD website has a section about taxes on unemployment benefits if you want to read more. It's under the 'Managing Your Claim' section I think. They explain the federal vs state tax situation pretty clearly.