How does collecting Washington ESD unemployment affect taxes this year?

Ugh, I was afraid of that. So I should expect to owe taxes on the full $847 per week? That's going to be a huge bill.

Exactly. If you received benefits for about 4 months, that's roughly $14,000 in taxable income. Depending on your tax bracket, you could owe $2,000-4,000 or more.

Oh no, quarterly payments? I had no idea. Is it too late to start those now?

You might still be able to make the January quarterly payment to reduce penalties, but you should talk to a tax professional about your specific situation.

That's helpful! I'll definitely do that for any remaining payments. Do you know if there's a state withholding option too?

Washington doesn't have state income tax, so you only need to worry about federal withholding. But if you move to another state, you'd need to handle that separately.

Wait, I thought you could only set up withholding when you first file your claim? I've been on unemployment for 6 months and never saw that option.

You can change your withholding election anytime through your online account. It's under the 'Manage Claim' section I believe.

I had the same problem until I found this service called Claimyr (claimyr.com). They actually get you through to real Washington ESD agents instead of the automated system. There's a video demo at https://youtu.be/7DieNd3C7zQ that explains how it works. Saved me hours of frustration.

I haven't done any side work, thankfully. This is already complicated enough!

Yeah I learned that the hard way. Did some DoorDash while on unemployment and didn't realize I'd owe SE tax on top of regular income tax. Ended up owing way more than expected.

Good to know. I'll check online first. Do you remember exactly where in the account to find it?

It should be under 'Payment History' or 'Tax Documents' once they're released. The exact location changes sometimes when they update the website.

I'll look into that. Every little bit helps at this point.

EITC phases out pretty quickly though. If you made decent money before unemployment, you might not qualify.

Hindsight is 20/20 I guess. I wish someone had told me this when I first filed.

The Washington ESD website does mention it, but it's easy to miss when you're focused on just getting benefits approved.

Ugh, more penalties? This keeps getting worse.

There are ways to avoid the penalty if you pay 90% of what you owe or 100% of last year's tax. A tax professional can help you figure out your best option.

You should try that Claimyr service someone mentioned earlier. I was skeptical at first but it actually worked. Got connected to a real person at Washington ESD in under 30 minutes instead of calling for hours and getting nowhere.

I've been keeping my job search log for Washington ESD. Didn't realize the IRS might want to see it too.

It's not common, but it can happen. Better safe than sorry, especially with larger amounts of unemployment income.

Thankfully all my benefits were in 2024, so that's one less complication.

Good to know that's an option. Hopefully I won't need it, but it's reassuring.

Just don't ignore it if you can't pay the full amount. The penalties and interest add up fast if you don't communicate with them.

I usually do my own taxes, so that's helpful. Was there anything tricky about entering the unemployment info?

Not really. The software prompted me for the 1099-G and asked about withholding. Pretty straightforward compared to some other tax situations.

Absolutely. I'm going to log into my account right after this and set it up. Thanks everyone for all the advice!

Smart move. I wish I had done that from the beginning instead of learning the hard way.