How much of unemployment is taxed - Washington ESD benefits

All unemployment benefits are considered taxable income at the federal level. Washington state doesn't have income tax so you don't owe state taxes on it. You should have received a 1099-G form from Washington ESD showing exactly how much you received.

If you didn't elect to have federal taxes withheld from your weekly claims, you might owe a decent chunk when you file. The IRS treats unemployment the same as regular income for tax purposes.

Had the same question last year! I used Claimyr to get through to Washington ESD to verify my tax withholding elections because I couldn't remember what I'd chosen. Their service at claimyr.com helped me get connected without the usual hour-long wait times. There's even a demo video at https://youtu.be/7DieNd3C7zQ showing how it works.

Just to clarify - the entire amount on your 1099-G is taxable as ordinary income. If you had federal withholding elected, it would show up in box 4 of the form. Without withholding, you'll owe based on your total tax bracket.

wait so ALL of it is taxed? I thought maybe the first few thousand might be exempt or something

I made the mistake of not having taxes withheld and ended up owing $1,800 when I filed. Learned that lesson the hard way!

Check your SecureAccess Washington account - you can see your payment history and tax withholding elections there. If you can't get logged in, that Claimyr service someone mentioned earlier might help you reach Washington ESD to get account access.

Don't forget you might also be able to deduct job search expenses if you itemize, though most people take the standard deduction anyway.

The 1099-G should show both your total benefits received AND any federal taxes that were withheld. Box 1 is total benefits, box 4 is federal withholding.

Been doing taxes for 20 years and unemployment is always fully taxable federally. Washington state has no income tax so that's not a concern. Just make sure you report the full 1099-G amount as income.

i thought there was some covid relief that made unemployment not taxable for 2021?

If you're still having trouble getting your 1099-G or checking your withholding status, I had good luck with Claimyr recently. They got me connected to a Washington ESD agent in about 15 minutes instead of the usual nightmare of calling.

Pro tip: if you're still collecting unemployment this year, elect the 10% federal withholding option on your weekly claims to avoid a big tax bill next year.

Just remember that unemployment income can also affect your eligibility for certain tax credits like the earned income credit, so factor that in when filing.