How often are federal unemployment taxes deposited - Washington ESD payroll question

That matches what I thought. We're usually around $800-900 per quarter so we should be good with quarterly deposits.

Just make sure you're calculating on the first $7,000 of each employee's wages for the year. The rate is 6% but you get credit for state unemployment taxes paid to Washington ESD.

You might be thinking of federal income tax withholding or FICA taxes. Those can be monthly or semi-weekly depending on your deposit schedule. FUTA is different - it's quarterly for most small businesses.

oh that makes sense, we probably got confused because we do payroll taxes monthly

I haven't heard of that service before. Do they help with federal tax questions too or just Washington ESD issues?

They specifically help you reach Washington ESD agents by phone. For federal questions you'd still need to contact the IRS directly, but having the state side figured out makes everything clearer.

Good point. I need to make sure our payroll system is tracking that correctly. Do you know if the $7,000 base changes from year to year?

It can change but it's been $7,000 for several years now. The IRS announces any changes well in advance.

Honestly, good payroll software is worth every penny. It tracks all the different wage bases and deposit schedules automatically.

any recommendations? we're still doing everything manually and its getting overwhelming

Yep, Form 940 is due every year regardless. Due date is January 31st, or February 10th if you made all your deposits on time.

That ten-day extension for timely deposits is nice to know about. Takes some pressure off the year-end rush.

How do you get through to them? Every time I call I get a busy signal or sit on hold forever.

I actually started using claimyr.com to get connected. It's a service that helps you reach Washington ESD agents without sitting on hold. Saved me hours of frustration.

That's a great point. So staying current with Washington ESD isn't just about state compliance - it affects federal taxes too.

Exactly. It's one of those things where falling behind on one creates problems with the other.

New businesses follow the same quarterly rules, but make sure you register for your federal EIN and Washington ESD employer account as soon as you hire your first employee. Don't wait until the end of the quarter.

we got our EIN already but still working on the washington esd registration. its more complicated than i expected

How big were the penalties? I'm worried about making a mistake in our first year.

It was about $150 in penalties on maybe $600 in taxes. The percentage is small but it adds up, especially if you're consistently late.

Is that service expensive? We're trying to keep costs down as a new business.

The peace of mind is worth it when you're dealing with tax compliance issues. Check out their demo at https://youtu.be/7DieNd3C7zQ to see how it works.

What makes a state lose credit? I want to make sure I understand how this all connects.

Usually it's when a state's unemployment trust fund goes into debt to the federal government and they don't pay it back quickly enough. Washington has managed to avoid that situation.

I get the frustration, but once you understand the pattern it's not too bad. The key is just staying organized and not waiting until the last minute.

easy for you to say, you probably have experience with this stuff

That's a good idea. I've been winging it so far but a systematic approach would definitely help.

I also keep a simple spreadsheet tracking wages and tax liabilities by quarter. Makes it easy to see when you're approaching deposit thresholds.

No, you only deposit if you actually owe tax. But you still need to file Form 940 at year-end even if the amount is zero.

ok that makes sense, thanks for clarifying

Different agencies, different purposes. State unemployment provides the actual benefits to workers, federal is more about maintaining the overall system and providing loans to states when needed.

i guess that explains why washington esd handles most of the day-to-day stuff

I'll look that up. Is it written in plain English or is it full of tax jargon?

It's clearer than most IRS publications but still pretty technical. Sometimes talking to a person is easier than trying to parse the official guidance.

Perfect summary. That's exactly what I needed to know. Thanks everyone for the help!

No problem. These employer tax questions come up a lot and it's good to have a clear answer in one place.

Agreed. Wish I'd found a thread like this when I was starting out. Would have saved me a lot of stress and probably some penalty fees too.