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

Yes, unemployment benefits are taxable income for federal taxes. You should have received a 1099-G form from Washington ESD showing how much you received. Washington state doesn't have income tax so you don't owe state taxes on it.

ugh yes learned this the hard way last year... owed like $2800 in taxes on my unemployment. You can have them withhold 10% for federal taxes when you file your weekly claims but most people don't know about that option

Yes, unemployment benefits are considered taxable income by both federal and state governments. Washington ESD should have given you the option to have taxes withheld when you first filed your claim. You can still request withholding now by logging into your account.

Yes, unemployment benefits are definitely taxable as regular income. Washington ESD should have sent you a 1099-G form showing the total amount you received. You'll need to report that on your federal tax return.

ugh same boat here, collected UI for 6 months and never thought about taxes. this is gonna hurt

This is such a common surprise for people. The IRS treats unemployment benefits as regular income, so they're taxed at your normal tax rate. If you received a significant amount, you might want to make estimated tax payments to avoid penalties.

The federal government taxes unemployment at your regular income tax rate, but Washington state doesn't have income tax so at least you don't owe state taxes on it. When you were filing weekly claims, there should have been an option to have 10% withheld for federal taxes.

I had this same panic last year when I realized I'd have to pay taxes on my UI benefits. Ended up using Claimyr to get through to someone at Washington ESD to clarify some questions about my 1099-G. Their service got me connected to an agent in like 20 minutes instead of spending hours on hold. You can check out their demo at https://youtu.be/7DieNd3C7zQ if you need to talk to someone at ESD about tax documents.

I made the same mistake last year! Collected about $15K in unemployment and ended up owing $2,800 at tax time. You can go into your Washington ESD account right now and request 10% federal withholding. Better late than never.

I had this exact problem two years ago and ended up owing $1,800 in taxes on my unemployment. If you're having trouble reaching Washington ESD to get copies of your 1099-G or need to verify your benefit amounts, I found this service called Claimyr that actually got me through to an agent. Check out claimyr.com - they have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

WAIT WHAT??? I collected unemployment for 8 months and nobody told me I'd have to pay taxes on it! This is so unfair, I'm already struggling financially and now I have to pay MORE money??

If you're having trouble reaching Washington ESD to set up withholding, I used Claimyr recently to get through to an agent. They have this service at claimyr.com that helps you actually connect with a human instead of sitting on hold forever. There's a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Saved me hours of calling.

Wait, I thought Washington state doesn't have income tax? So we only owe federal taxes on unemployment, right?

The government takes taxes on everything these days. They give you unemployment then want it back at tax time. Makes no sense.

Wait so if I made $15000 last year working plus $6000 in unemployment, I have to pay taxes on all $21000? That doesn't seem right

To change your withholding, log into your Washington ESD account, go to 'Manage Tax Withholding' and select either 10% federal or a custom amount. The system will start taking it out of your next weekly payment.

Pro tip: if you're still collecting unemployment, go into your weekly claim filing and elect to have 10% withheld for federal taxes. It's better to have too much withheld and get a refund than to owe a big chunk at tax time.

The 1099-G should show the exact amount you received. Make sure to double-check it against your own records because sometimes there are errors. If there's a mistake you'll need to contact Washington ESD to get it corrected.

I'm a tax preparer and see this confusion every year. Yes, unemployment is taxable income. No, Washington state doesn't tax it. Yes, you should have been setting aside money for taxes. If you can't pay the full amount when you file, the IRS has payment plan options.

You should also keep track of any job search expenses - mileage, printing resumes, etc. Those might be deductible and help offset some of the tax burden.

You should definitely get your 1099-G from Washington ESD before filing. The IRS gets a copy too so they'll know exactly how much you received. Don't try to skip reporting it.

My tax guy told me to always have taxes withheld from unemployment. You never know how long you'll be collecting and it's easier to get a refund than come up with a big payment.

Also worth noting - if you paid back any overpayments to Washington ESD during the year, that might affect your tax situation too. Keep records of any repayments you made.

The tax withholding option is buried in the weekly claim questions. Look for something like 'Do you want federal income tax withheld from your benefits?' It's usually near the end of the weekly claim form.

PROTIP: if you're getting unemployment this year, set aside about 15-20% for taxes. I put mine in a separate savings account every week so I'm not scrambling at tax time.

Another thing - if you can't get through to Washington ESD by phone to ask about withholding options, that Claimyr service I mentioned earlier really works. I was skeptical at first but it actually connected me to an agent in under 30 minutes instead of the usual 3-hour wait times.

Just remember that even if you had taxes withheld, you might still owe money depending on your other income. The 10% withholding isn't always enough to cover your full tax liability.

The 1099-G will show your total benefits for the year in Box 1. That's the amount you report on your tax return. Make sure the amount matches what you actually received - sometimes there are errors.

been doing taxes for 20 years and unemployment always trips people up. yes its taxable, no washington state doesn't tax it, yes you should have withheld if you could afford to

Also remember you'll get a 1099-G form from Washington ESD in January showing how much you received. You'll need that to file your taxes. Don't lose it!

I've been on unemployment twice and both times forgot about taxes until filing time. Cost me big time the first time. Now I always do 15% withholding just to be safe.

I'm in the same situation but only collected for 2 months. Probably only got like $3000 total. Still have to report it?

The good news is you can usually set up a payment plan with the IRS if you end up owing more than you can pay at once. Don't let tax debt stress you out too much.

PSA: if you're currently on unemployment and reading this, GO INTO YOUR ACCOUNT RIGHT NOW and elect to have taxes withheld. Future you will thank you.

Had a friend who tried to hide his unemployment income and got audited. The IRS already knows what Washington ESD paid you, so there's no point trying to avoid reporting it.

For anyone struggling to get through to Washington ESD about tax documents or payment verification, I used Claimyr last month to reach an agent about my 1099-G discrepancy. Worked great - got connected in about 45 minutes instead of spending days trying to call myself.

Just remember that even though Washington doesn't tax unemployment, you might still owe state taxes if you worked in multiple states during the year.

If you're really worried about the tax hit, consider making estimated quarterly payments next year if you end up on unemployment again. Helps spread out the pain.

Bottom line: unemployment is income, income is taxable. The sooner you accept this reality the better you can plan for it. Set money aside, have taxes withheld, or be prepared to owe when you file.

One more thing - if you moved or changed addresses while on unemployment, make sure Washington ESD has your current address for the 1099-G mailing. I missed mine one year because it went to my old apartment.

Anyone know if there are any deductions or credits that might help offset the tax on unemployment income?

Thanks everyone for all the info. Sounds like I need to prepare for a decent tax bill. At least now I know what to expect and won't make the same mistake next time.

Tax withholding is optional but recommended. I never do it because I'd rather have the full amount now and deal with taxes later. But that's just me.

Don't forget you might qualify for earned income credit or other tax credits that could reduce what you owe. Unemployment doesn't disqualify you from most credits.

Quick question - if I'm collecting standby unemployment because my job is seasonal, are those benefits taxable too?

The whole tax system is confusing. Why can't they just make unemployment non-taxable since people are already struggling?

Pro tip: if you're getting close to the end of your benefit year, you might want to have extra withheld from your last few payments to cover any shortfall.

I used Claimyr last month when I needed to talk to Washington ESD about changing my withholding amount. Super easy process and way faster than trying to call directly. Worth every penny to avoid the phone maze.

Bottom line - yes, you'll owe taxes on unemployment. Set up withholding now, keep good records, and don't panic. Lots of people are in the same boat.

Don't forget to update your withholding if you get a part-time job while on partial unemployment. Your tax situation changes when you have multiple income sources.

This thread has been super helpful. I'm in the exact same situation and had no idea about the tax implications. Going to change my withholding right now.

For what it's worth, I used Claimyr.com last month to get through to Washington ESD about my 1099-G. Had questions about how they calculated my annual total and needed clarification. The service worked exactly as advertised - got me connected to an actual person who could answer my questions instead of dealing with the phone system runaround.

One thing to keep in mind - if you're still unemployed when you file your taxes, you might qualify for additional tax credits that could offset some of what you owe on the unemployment benefits.

This happened to my sister last year. She ended up owing like $3,500 in taxes on her unemployment and had no idea it was coming. Set up a payment plan with the IRS and paid it off over 18 months. Not ideal but better than penalties and interest piling up.

The 1099-G will also show any federal taxes that were withheld if you elected to have them taken out. Make sure to include that information when you file your taxes so you get credit for taxes already paid.

If anyone needs to reach Washington ESD about tax document issues, I had good luck with Claimyr recently. Was trying to get clarification on some discrepancies in my 1099-G and their system got me through to someone who could actually help. Saved me hours of frustration with the regular phone system.

Bottom line - yes you have to pay federal taxes on unemployment benefits. Start setting aside money now if you're still collecting. The 10% withholding option is your friend. And if you're confused about anything, talk to a tax professional or find a way to reach someone at Washington ESD who can clarify.

I'm in a similar situation and this thread has been incredibly helpful! I've been collecting unemployment for about 4 months and had no idea about the tax implications. Just logged into my Washington ESD account and found the tax withholding option - it was buried in the account settings under "Manage Tax Withholding" like someone mentioned. Set it to 10% federal withholding starting with my next payment. Better late than never! Thanks to everyone who shared their experiences and advice. It's reassuring to know I'm not the only one who was caught off guard by this.