Do you owe taxes on unemployment benefits from Washington ESD?
I'm getting ready to file my 2024 taxes and just realized I might owe money on my unemployment benefits. I collected UI from Washington ESD for about 6 months last year after getting laid off from my manufacturing job. Nobody ever told me these payments were taxable! I got a 1099-G form in the mail showing I received $8,200 total. Now I'm panicking because I didn't have any taxes withheld. Does anyone know if I'm going to owe a lot of money? I can't afford a huge tax bill right now.
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Chloe Robinson
Yes, unemployment benefits are considered taxable income at the federal level. You'll need to report that $8,200 on your tax return. Washington state doesn't have an income tax, so you won't owe state taxes on it. The amount you owe federally depends on your total income and tax bracket.
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CosmicCrusader
•Oh no, so I definitely owe money then? I had no other income last year besides the unemployment.
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Chloe Robinson
•Not necessarily! With only $8,200 in income, you might not owe anything depending on your filing status and deductions. The standard deduction for 2024 is $14,600 for single filers.
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Diego Flores
I learned this the hard way a few years ago. Washington ESD gives you the option to have taxes withheld when you file your weekly claims, but it's not automatic. Look for the withholding option in your eServices account for future claims.
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CosmicCrusader
•I wish I had known this! I just always clicked through the weekly claim questions without really reading them carefully.
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Diego Flores
•Yeah, it's easy to miss. I think the federal withholding rate is 10% if you choose it. Would have saved me from owing $600 that year.
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Anastasia Kozlov
If you're having trouble reaching Washington ESD about tax withholding questions, I used a service called Claimyr that helps you get through to an actual agent. They have a website at claimyr.com and there's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works. Really helpful when you can't get through the phone lines.
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CosmicCrusader
•Thanks for the tip! I've been trying to call Washington ESD for weeks about updating my withholding preferences but keep getting busy signals.
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Sean Flanagan
•How much does Claimyr cost? I'm always skeptical of these services.
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Anastasia Kozlov
•It's worth it compared to spending hours on hold. The service focuses on getting you connected, not collecting your personal info.
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Zara Mirza
The 1099-G shows your total UI payments for the year. Make sure the amount matches what you actually received. Sometimes there are errors, especially if you had any overpayments or adjustments during the year.
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CosmicCrusader
•Good point! I did have one week where they said I was overpaid $150 and I had to pay it back. Should that affect the 1099-G amount?
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Zara Mirza
•The 1099-G should reflect the net amount you kept, not the gross amount paid. So if you repaid $150, that should be subtracted from the total.
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NebulaNinja
UGHHH this is so frustrating! Why doesn't Washington ESD just automatically withhold taxes like regular employers do?? I'm probably going to owe hundreds of dollars I don't have.
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Chloe Robinson
•I understand the frustration, but unemployment benefits are designed to replace income quickly. Making withholding optional means people get more money up front when they need it most.
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NebulaNinja
•I guess that makes sense, but they should make it more obvious that you'll owe taxes later!
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Luca Russo
Just a quick heads up - if you can't pay the full amount you owe, the IRS has payment plan options. Don't just ignore it if you owe money.
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CosmicCrusader
•That's reassuring to know. I was worried they'd come after me immediately if I couldn't pay everything at once.
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Chloe Robinson
For next time, you can request tax withholding when you file your initial claim or update it later through your eServices account. Go to 'Restart Your Claim' and look for the tax withholding section. Federal withholding is typically 10%.
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Nia Wilson
•Where exactly is this option? I'm looking at my eServices account now and don't see anything about taxes.
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Chloe Robinson
•It should be under 'File Weekly Claim' - there's usually a question about federal tax withholding. You might need to restart your claim to change it.
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Mateo Sanchez
Same boat here! Got my 1099-G last week and realized I owe taxes on $6,800 in benefits. Definitely requesting withholding on any future claims.
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CosmicCrusader
•At least I'm not alone in being surprised by this! Did you use any tax software to figure out what you owe?
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Mateo Sanchez
•Yeah, I used FreeTaxUSA and it calculated everything automatically once I entered the 1099-G info. Turned out I only owed about $400.
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Aisha Mahmood
Pro tip: keep all your job search documentation from while you were on unemployment. Some job search expenses might be deductible and could help offset the tax you owe.
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CosmicCrusader
•What kind of job search expenses? I drove to a lot of interviews and printed resumes.
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Aisha Mahmood
•Mileage for job interviews, resume printing, professional development courses, etc. Keep receipts for next year too.
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Anastasia Kozlov
If you need to talk to someone at Washington ESD about tax withholding for future claims, that Claimyr service I mentioned earlier really does work. I was able to get through and update my withholding preferences after being on hold for literally hours using their regular number.
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Ethan Clark
•I'm still skeptical about third-party services, but Washington ESD's phone system is absolutely terrible. Might be worth a shot.
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Anastasia Kozlov
•I was skeptical too, but after getting hung up on 15 times in one day, I was willing to try anything. Worked perfectly.
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AstroAce
Wait, I thought there was something about unemployment being tax-free during COVID? Does that apply to 2024 benefits too?
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Chloe Robinson
•No, that was only for 2020 tax returns. The American Rescue Plan excluded up to $10,200 in unemployment benefits for that year only. 2024 benefits are fully taxable.
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AstroAce
•Damn, I was hoping that was still a thing. Thanks for clarifying.
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Yuki Kobayashi
Another thing to check - make sure your 1099-G doesn't include any weeks you were disqualified or had to pay back. I had a week that was initially paid but then reversed, and it took forever to get the corrected form.
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CosmicCrusader
•How do you request a corrected 1099-G? Do you have to call Washington ESD?
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Yuki Kobayashi
•Yeah, you have to call them. Good luck getting through though - I ended up using that Claimyr thing someone mentioned earlier to actually reach an agent.
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Carmen Vega
I'm a tax preparer and see this confusion every year. Yes, unemployment is taxable income. No, it's not the end of the world if you owe money. The IRS has payment plans and you won't go to jail for owing a few hundred dollars.
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CosmicCrusader
•Thank you for the reassurance! I was really spiraling about this. What's the typical payment plan option?
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Carmen Vega
•For amounts under $50,000, you can usually get a payment plan online through the IRS website. Monthly payments are based on what you can afford.
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Andre Rousseau
just got my 1099-G too and its showing way more than i actually got, anyone know why this might happen?
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Chloe Robinson
•Could be several reasons - duplicate payments that were later reversed, benefits paid under someone else's name by mistake, or system errors. You'll need to call Washington ESD to get it corrected.
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Andre Rousseau
•ugh calling washington esd is impossible, maybe ill try that claimyr thing
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Zoe Stavros
Don't forget that if you had any other income during the year, the taxes on your unemployment might push you into a higher bracket. It's not just about the unemployment amount alone.
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CosmicCrusader
•I only had unemployment income last year, no other jobs. Does that mean I'm in a lower tax bracket?
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Zoe Stavros
•Yes, with only $8,200 in income you're in the lowest bracket. You might not owe anything after the standard deduction.
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Jamal Harris
The Washington ESD website has a FAQ about taxes on unemployment benefits. It's buried in their forms section but it explains the whole process pretty clearly.
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CosmicCrusader
•I'll check that out, thanks! I've been so overwhelmed by all the tax stuff I didn't think to look on their website.
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GalaxyGlider
My brother went through this last year. He owed about $800 on his unemployment benefits but was able to set up a payment plan with the IRS for $50 a month. It's really not as scary as it seems at first.
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CosmicCrusader
•That's really helpful to know! I was imagining them wanting everything at once. $50 a month I could probably handle.
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Mei Wong
Just want to add that if you're still collecting unemployment benefits, definitely set up the tax withholding now. It's so much easier than dealing with a big bill at tax time.
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CosmicCrusader
•I'm not currently on unemployment but I'll definitely remember this if I ever need benefits again. Lesson learned!
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Liam Sullivan
•How do you set up the withholding? I'm currently on standby and want to make sure I don't get hit with a big tax bill next year.
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Mei Wong
•When you file your weekly claim, there should be a question about federal tax withholding. You can choose to have 10% withheld from each payment.
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Amara Okafor
Update: I just checked my eServices account and found the tax withholding option! It was under the weekly claim section like everyone said. Thanks for all the help, this thread really eased my anxiety about the whole situation.
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Chloe Robinson
•Glad you found it! Having taxes withheld upfront really is the way to go if you can afford the slightly smaller weekly payments.
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CosmicCrusader
•Great! I'm not currently on benefits but I bookmarked the location in case I need it in the future. This whole discussion has been really educational.
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