Do you pay social security tax on Washington ESD unemployment benefits?

No, you don't pay social security taxes on unemployment benefits. Social security and medicare taxes (FICA) aren't deducted from UI payments. You only pay federal and state income taxes if you choose to have them withheld.

Yeah unemployment is considered unearned income for tax purposes so no payroll taxes like social security. But definitely still taxable as regular income!

I learned this the hard way last year when I was trying to figure out my taxes. Spent forever on hold with Washington ESD trying to ask about social security deductions that don't even exist lol. If you're having trouble reaching them about tax questions, I found this service called Claimyr (claimyr.com) that actually got me through to an ESD agent in like 20 minutes. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

To clarify the tax situation: unemployment benefits are subject to federal income tax and Washington state doesn't have income tax, so you'd only owe federal. You can elect to have 10% federal tax withheld when you file your weekly claims, or handle it through quarterly estimated payments.

ugh taxes are so confusing when you're on unemployment. i never know what to do about any of this stuff

I've been on unemployment twice and both times I just had the 10% federal withheld automatically. Makes tax time way easier even if you get a smaller weekly payment.

Just to add - you'll get a 1099-G form from Washington ESD at the end of the year showing how much you received in unemployment benefits. That's what you use to report it on your tax return.

The whole tax thing with unemployment stressed me out so much until I figured out it's actually pretty straightforward. No FICA taxes makes it simpler than regular paychecks in some ways.

For anyone still confused: Social Security and Medicare taxes = NO. Federal income tax = YES (if your total income is high enough). State income tax = Not applicable in Washington. That's really all there is to it.

i had to call washington esd about this exact question last month and it took forever to get through. ended up using that claimyr thing someone mentioned earlier and it actually worked great for getting connected to an agent who could explain the tax stuff

Just remember that even though there's no social security tax, unemployment benefits can still affect your social security earnings record since they're based on your work history. But that's different from paying social security taxes on the benefits themselves.

Another thing to keep in mind - if you do any odd jobs or freelance work while on unemployment, THAT income would be subject to social security taxes if you're self-employed. Just the UI benefits themselves are exempt.

The IRS website has a good explanation of this too if anyone wants the official word on unemployment benefit taxation. Search for 'unemployment compensation' on irs.gov.

been getting UI for 2 months now and just started having the 10% withheld after reading this thread. wish i had known earlier but better late than never i guess

This has been super helpful! I was getting worried about a huge tax bill but sounds like it's manageable if you plan for it. Thanks everyone for explaining it so clearly.

One last thing - if you're married filing jointly, make sure your spouse knows about the unemployment income when they're doing your taxes. It all gets combined and could potentially push you into a higher tax bracket.

thanks to everyone who answered this question! was wondering the same thing myself and this cleared it up perfectly. no social security tax but still regular income tax - got it!

For what it's worth, I used Claimyr recently when I needed to talk to someone at ESD about my benefit calculation and it was really smooth. Sometimes it's worth paying a little to avoid the phone runaround when you need answers about this stuff.

Perfect timing on this thread - I was literally about to call ESD with this exact question tomorrow. Now I don't have to waste hours on hold!

Just want to confirm what everyone else said - been on unemployment multiple times over the years and never paid social security taxes on the benefits. Only regular income tax. The 1099-G form makes it easy to report at tax time too.