Do you pay taxes on unemployment checks from Washington ESD?

Yes, unemployment benefits are considered taxable income by both the IRS and Washington state. You'll receive a 1099-G form from Washington ESD at the end of the year showing how much you received. You can choose to have 10% federal tax withheld when you file your weekly claims - there's an option for this in your account.

wait what?? nobody told me unemployment was taxable when I filed my claim. I've been spending all of it thinking it was like other government assistance

I learned this the hard way last year and ended up owing like $1800 in taxes on my unemployment. Now I always have the 10% withheld automatically. It's better to get a small refund than owe a bunch.

For anyone struggling to get through to Washington ESD to change your withholding preferences, I found this service called Claimyr (claimyr.com) that actually gets you connected to an agent. There's a video showing how it works at https://youtu.be/7DieNd3C7zQ. Saved me hours of trying to call and getting busy signals.

The withholding option is on the page where you certify your weekly claim. There's a checkbox that says something like 'withhold federal income tax' and you just check it. Pretty straightforward once you know where to look.

This is why I hate dealing with government programs. They never tell you the important stuff upfront. How are people supposed to know unemployment is taxable when they're already stressed about losing their job?

Pro tip: if you're getting unemployment benefits and also doing any gig work or part-time jobs, make sure you're reporting all that income correctly. The combination can push you into a higher tax bracket and the 10% withholding might not be enough.

just went through this last tax season and it was a nightmare. Make sure you keep good records of everything because the 1099-G from Washington ESD sometimes has errors. I had to call them 3 times to get mine corrected.

If you're really struggling to reach Washington ESD about tax questions or withholding changes, that Claimyr service someone mentioned actually worked for me too. I was trying to get clarification on my 1099-G and couldn't get through for weeks.

Another thing to consider - if you end up owing taxes on unemployment and can't pay it all at once, the IRS has payment plan options. Don't just ignore it if you can't afford the full amount.

wish someone had told me about the quarterly estimated tax payments. I thought as long as I wasn't working full time I didn't have to worry about it. Wrong!

For what it's worth, I've been having 10% withheld from my Washington ESD payments and it seems to cover most of what I'll owe. Better safe than sorry, especially after reading all these horror stories about big tax bills.

One more thing - if you had taxes withheld from unemployment but then got a job before the end of the year, don't forget to adjust your W-4 withholding at your new job. You might be overwithholding if you don't account for what was already taken out.

The 1099-G usually comes out in January, same timing as W-2s from employers. Make sure your address is updated with Washington ESD so you actually receive it.

This whole thread has been really helpful. I had no idea about most of this tax stuff when I filed for unemployment. Really wish Washington ESD was more upfront about the tax implications.

Final thought - if you're doing your own taxes, make sure whatever software you use can handle unemployment income properly. Some of the free basic versions don't include all the forms you might need.