Do you pay taxes on unemployment benefits in Washington - confused about tax obligations
I've been receiving unemployment benefits from Washington ESD for about 2 months now and just realized I might need to pay taxes on this money. I'm getting $485 per week and haven't been setting anything aside for taxes. Do I need to pay federal and state taxes on unemployment benefits? Should I have been withholding taxes from my weekly payments? I'm really worried I'm going to owe a huge amount when I file my taxes next year.
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CyberSiren
Yes, unemployment benefits are considered taxable income by the IRS. You'll receive a 1099-G form from Washington ESD in January showing how much you received. The good news is Washington state doesn't have income tax, so you only owe federal taxes on it.
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Ava Thompson
•Oh no, so I do owe federal taxes on all of it? That's going to be a lot of money I don't have saved up.
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CyberSiren
•You can ask Washington ESD to withhold 10% for federal taxes when you file your weekly claims. Look for the tax withholding option in your claim.
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Miguel Alvarez
I learned this the hard way last year - owed $1,200 in taxes on my unemployment. Now I always have them withhold the 10% federal tax when I file my weekly claims. It's optional but definitely worth it if you don't want a surprise tax bill.
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Zainab Yusuf
•How do you set up the tax withholding? I can't find that option anywhere on the Washington ESD website.
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Miguel Alvarez
•When you file your weekly claim, there should be a question about federal tax withholding. You can choose to have 10% withheld or not. If you don't see it, you might need to call Washington ESD.
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Connor O'Reilly
•Good luck getting through to Washington ESD on the phone! I've been trying for weeks to get someone to help me with my claim issues. The phone lines are always busy.
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Yara Khoury
I had the same problem trying to reach Washington ESD about tax withholding and other questions. After getting hung up on repeatedly, I found this service called Claimyr that actually got me through to a real person at Washington ESD. You can check it out at claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.
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Ava Thompson
•Is that legitimate? I'm desperate to talk to someone about setting up tax withholding and my claim status.
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Yara Khoury
•Yeah it's real - they basically call Washington ESD for you and get you connected to an agent. Saved me hours of frustration trying to get through myself.
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Keisha Taylor
wait so we have to pay taxes on unemployment?? i thought that was money from the government to help us
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CyberSiren
•Unfortunately yes, unemployment benefits count as income for tax purposes. It's not like welfare or food stamps which aren't taxable.
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Keisha Taylor
•that sucks!! im already broke and now i have to save money for taxes too
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StardustSeeker
The tax withholding option is definitely there when you file your weekly claim. I've been using it since I started collecting UI benefits. It's under the section where they ask about your work and earnings for the week - there's a separate question about federal tax withholding.
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Zainab Yusuf
•I must be missing it somehow. Are you filing through the Washington ESD website or the mobile app?
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StardustSeeker
•I use the website. After you answer the work search questions, it should ask if you want federal taxes withheld. Maybe clear your browser cache and try again?
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Paolo Marino
Just to clarify for everyone - unemployment benefits are fully taxable at the federal level. Washington state has no income tax so you don't owe state taxes. The 10% withholding might not cover your full tax liability depending on your total income and tax bracket, but it helps.
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Ava Thompson
•So even with 10% withheld I might still owe more taxes? This is getting overwhelming.
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Paolo Marino
•It depends on your total income for the year and filing status. If unemployment is your only income, 10% withholding should cover most of what you owe. Consider talking to a tax professional if you're concerned.
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Connor O'Reilly
The whole system is ridiculous. They make it nearly impossible to reach anyone at Washington ESD when you have questions, then expect you to figure out complex tax rules on your own. I've been unemployed for 4 months and still can't get answers about my claim status.
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Amina Bah
•Have you tried that Claimyr service someone mentioned earlier? I was skeptical at first but it actually worked for me. Got through to Washington ESD in about 20 minutes instead of spending hours on hold.
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Connor O'Reilly
•I might have to try that. I'm at my wit's end with trying to call them directly.
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Oliver Becker
This is why I always tell people to plan ahead when collecting unemployment. Set aside at least 15-20% of each payment for taxes and don't spend it. Better to have too much saved than to owe money you don't have.
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Ava Thompson
•I wish I had known this from the beginning. Now I'm behind and don't know how to catch up.
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Oliver Becker
•You can still start now and set up the tax withholding going forward. For what you've already received, try to save what you can even if it's just $20-30 per week.
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Natasha Petrova
does anyone know if they send the 1099 form automatically or do we have to request it from washington esd?
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CyberSiren
•Washington ESD sends 1099-G forms automatically in January to anyone who received unemployment benefits during the tax year. You should get it in the mail and it's also available online.
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Natasha Petrova
•ok good, i was worried i'd have to call them to get it
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Javier Hernandez
I'm a tax preparer and see this confusion every year. Yes, all unemployment benefits are taxable income. The 1099-G will show the total amount you received and any federal taxes withheld. Keep all your unemployment documentation organized for tax season.
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Ava Thompson
•What other documentation should I keep besides the 1099-G? I have all my weekly claim confirmations.
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Javier Hernandez
•Keep records of any taxes withheld, your weekly claim history, and any correspondence from Washington ESD. The weekly confirmations are good backup documentation.
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Emma Davis
Just wanted to add that if you're already collecting benefits and haven't been withholding taxes, you can change that setting for future claims. It won't affect past payments but will help going forward.
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Zainab Yusuf
•How do you change it? I still can't find the tax withholding option on my weekly claims.
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Emma Davis
•You might need to call Washington ESD to update your tax withholding preference. I know that's frustrating with their phone system, but that's probably your best option.
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LunarLegend
The phone situation at Washington ESD is absolutely terrible. I spent 3 weeks trying to get through about a simple question. Finally used Claimyr and got connected to an agent the same day. Worth every penny to avoid the frustration.
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Ava Thompson
•I think I'm going to have to try that service. I need to get my tax withholding set up and can't waste more time on hold.
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LunarLegend
•Definitely recommend it. They handle all the calling and waiting for you, then connect you when an agent is available.
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Malik Jackson
this is so stressful. i already can barely afford rent and now i have to worry about owing taxes on money i needed to survive
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CyberSiren
•I understand it's stressful, but remember you can set up payment plans with the IRS if you do owe taxes. Don't panic - just start planning now.
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Malik Jackson
•thanks, i didnt know about payment plans. that makes me feel a little better
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Isabella Oliveira
For anyone confused about the tax withholding option - it's usually on the same page where you report your work search activities. After you answer whether you looked for work, there should be a question about federal tax withholding. If you don't see it, your browser might be blocking it or you need to update your account settings.
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Zainab Yusuf
•I'm going to try logging out and back in again. Maybe that will refresh the page and show the option.
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Isabella Oliveira
•That's worth trying. Also make sure you're using a supported browser - sometimes older browsers don't display all the form fields correctly.
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Ravi Patel
I remember being shocked when I found out unemployment was taxable. Seems counterintuitive since you're already in a tough financial situation. But the IRS treats it like any other income unfortunately.
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Ava Thompson
•It really does seem unfair. We're already struggling financially and then have to pay taxes on the help we're getting.
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Ravi Patel
•I agree it's frustrating, but at least the 10% withholding option helps spread out the tax burden instead of getting hit with a big bill at once.
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Freya Andersen
Pro tip: if you're having trouble with the Washington ESD website not showing the tax withholding option, try using a different device or browser. Sometimes their site has compatibility issues. Also clear your cookies and cache.
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Zainab Yusuf
•I'll try that. I've been using Chrome on my phone mostly - maybe I should try on my laptop.
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Freya Andersen
•Yeah, the desktop version of their site usually works better than mobile for accessing all the features.
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Omar Zaki
Bottom line for everyone asking - yes you pay federal taxes on unemployment, no state taxes in Washington. Set up 10% withholding if possible, keep good records, and don't panic if you haven't been planning for taxes. You can still get it sorted out.
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Ava Thompson
•Thanks everyone for all the help. I feel much better understanding what I need to do now.
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Omar Zaki
•Glad we could help! The tax situation with unemployment benefits catches a lot of people off guard.
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