How much taxes does Washington ESD unemployment take out of benefits?

That makes sense! So it's a flat 10% rate, not based on income brackets or anything?

Correct, it's a flat 10% withholding rate for federal taxes on unemployment benefits in Washington state.

Ouch! Yeah I'm glad I selected the withholding option then.

Wait, can you change that option after you've already started receiving benefits? I didn't elect withholding either...

Perfect, thank you! I'll log in and change that right now.

Is there any way to have state taxes withheld too or is it just federal?

Washington state doesn't have a state income tax, so there's no state tax withholding option needed for unemployment benefits here.

Good point. I should probably set aside some additional money just in case.

Yeah I learned this the hard way. The 10% withholding wasn't enough for my situation and I ended up owing another $800.

You should be able to change it online without calling. Have you tried logging into your account?

I tried but it's not showing the option in my account for some reason. Maybe there's a glitch?

If you can't change it online, there's actually a service called Claimyr (claimyr.com) that helps people get through to Washington ESD agents. They handle the calling for you and can connect you directly to someone who can help with account changes. I used them last month when I had an adjudication issue.

Yes, Washington ESD will send you a 1099-G form by January 31st showing your total benefits received and any federal taxes withheld.

Perfect, that's what I was hoping to hear.

Your filing status and spouse's income will definitely affect your overall tax situation. The 10% withholding might not be enough if your combined income puts you in a higher tax bracket.

So should I have additional taxes withheld beyond the 10%?

You might want to consult with a tax professional or use the IRS withholding calculator to figure out if you need additional withholding.

Yes, the 10% federal tax withholding applies to all types of unemployment insurance benefits in Washington, including regular UI and standby unemployment.

thanks! i wasn't sure if standby was different since it's for specific situations

Agreed! I had no idea unemployment was taxable income when I first filed. Came as a shock at tax time.

The pandemic really caught a lot of people off guard with this since so many people were filing for unemployment for the first time.

This is good advice. I set up a payment plan and it was pretty straightforward.

How much do they charge in fees or interest for payment plans?

There are setup fees and interest charges, but it's better than having the IRS come after you for non-payment.

That sounds frustrating! Was Claimyr helpful?

Yeah, definitely worth it. They have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Way better than spending hours trying to call Washington ESD directly.

Good point. Quarterly payments can help avoid underpayment penalties.

How do you calculate what to pay quarterly though?

Use IRS Form 1040ES or consult with a tax professional to figure out the right amount.

Yes, this is important! A lot of people think short-term unemployment isn't taxable but it absolutely is.

Thanks for mentioning this. Every bit of unemployment income is taxable regardless of the reason.

That's smart planning. Your total income situation can definitely change during a long unemployment period.

How often can you change the withholding election? Is there a limit?

I'm not sure about limits, but I was able to change mine twice last year without any issues.

Good point about Social Security interactions. The tax situation gets more complex when multiple income sources are involved.

This is getting complicated. Maybe I should just talk to a tax professional about my specific situation.

How long did it take them to get you connected?

They called me back within a few hours and had me connected to a Washington ESD agent within minutes. Definitely beats trying to call yourself.

I might have to try that. I've been trying to reach them for weeks about my withholding issue.

Agreed! This has been super helpful. I feel much more confident about my unemployment tax situation now.

Same here. Glad I found this discussion before tax season hits.

This cannot be stressed enough. So many people get caught off guard by this at tax time.

Yep, learned this lesson the hard way during the pandemic when millions of people were filing for unemployment for the first time.