Does Washington ESD tax unemployment benefits - confused about 1099-G forms

Thanks! So I just enter the amount from box 1 on the 1099-G when I do my taxes?

Yes exactly, box 1 is your total unemployment compensation for the year.

No, unemployment insurance is very different from welfare programs. UI benefits are considered earned income replacement and have been federally taxable since the 1980s. You definitely need to report that $12k.

oh crap I had no idea. good thing I haven't filed yet I guess

I had the same problem until someone told me about Claimyr. It's a service that helps you get through to Washington ESD agents automatically. You just put in your number and they call you back when they connect. Check out claimyr.com - there's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

Really? That sounds too good to be true. Does it actually work for Washington ESD?

Yeah it worked for me last month when I needed to verify my job search records. Way better than sitting on hold for hours.

That would be in box 4 of your 1099-G form if you elected to have federal taxes withheld when you set up your claim.

Perfect, I see it now. Thanks!

No difference. Whether you were on standby, regular UI, or any other type of unemployment benefits through Washington ESD, it's all considered taxable income for federal purposes.

Got it, thanks for clarifying that.

I understand the frustration, but there actually is information about taxes on the Washington ESD website and when you set up your claim. Many people just miss it or don't think about it until tax time.

Maybe it's there now but I swear it wasn't obvious when I filed last year

Yeah I definitely don't remember seeing anything about taxes either when I was going through the claim process

Wish I had known this last year! Is it too late to change it if you're still collecting?

No, you can change your withholding election anytime by logging into your account and updating your tax withholding preferences.

You can download your 1099-G from your Washington ESD account online, or you can request a duplicate be mailed to your current address. You still need to report the income even without the form.

Oh good, I'll log in and download it. Thanks!

Yes, all unemployment compensation including any supplemental federal payments like the FPUC is taxable income. It should all be included on your 1099-G.

Ugh that really adds up then. Those extra payments were a lot.

Which software did you use? I'm looking for something simple.

I used TurboTax but I think most of the major ones can import tax documents now.

Unemployment insurance is designed as temporary income replacement and is funded partly by employer taxes. Workers compensation is considered reimbursement for injury-related losses. The tax treatment reflects these different purposes under federal tax law.

I guess that makes sense legally but it still feels like a kick when you're down

Yes, if you repaid unemployment benefits in the same tax year you received them, you generally don't have to include the repaid amount in your taxable income. If you repaid in a different year, there are special rules that might apply.

Good to know. I did have to pay back about $800 so that helps a little.

You should file an amended return (Form 1040X) to correct this. The IRS will likely catch the error anyway since they get copies of all 1099-G forms, so it's better to fix it yourself.

ugh ok I'll look into filing an amended return. This is so stressful.

Washington has no state income tax at all, so unemployment benefits are never taxed at the state level here. Only federal taxes apply.

That's one advantage of living in Washington I guess!

How much does that service cost?

I'm not sure about the exact cost but it was worth it to me to not waste hours trying to call. Much easier than the alternative.

How did you verify the correct amount?

I went through my payment history in my Washington ESD account and added up all the payments from last year.

Correct. The 1099-G is for the tax year when you received the benefits, not when you file your return. So benefits received in 2024 go on your 2024 tax return that you'll file in early 2025.

Perfect, thanks for confirming that timeline.

That's helpful context. Do you see people get in trouble for not reporting it?

The IRS usually catches it because they get the 1099-G data electronically. It's much better to file correctly the first time than deal with notices and penalties later.

Same here! This thread answered all my questions about the tax situation.

Good advice. I had to set up a payment plan last year and it was pretty straightforward online.