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Ella Knight

How to apply for unemployment tax number with Washington ESD?

I'm starting a small business next month and need to get set up with Washington ESD for unemployment taxes. I've been looking at their website but can't figure out exactly how to apply for an unemployment tax account number. Do I need to register before I hire my first employee or can I wait? The forms on the site are confusing and I'm not sure which one I need to fill out. Has anyone gone through this process recently?

You need to register for an unemployment insurance account within 30 days of becoming liable for UI taxes in Washington. This usually happens when you hire your first employee. Go to the Washington ESD business portal and look for the 'Register Your Business' section. You'll need your state business license number and federal EIN.

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Thanks! Do I need to have already hired someone or can I register before I actually hire anyone?

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You can register before hiring but you're not required to until you actually become liable. Most people wait until they hire their first employee to avoid unnecessary paperwork.

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i think you can do it online now but the washington esd website is terrible. took me forever to figure out where to submit everything last year when i started my landscaping business

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Yeah their website is really confusing. Did you end up calling them for help?

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tried calling but could never get through. ended up just figuring it out myself after like 3 hours

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If you're having trouble reaching Washington ESD by phone, I found this service called Claimyr that helps you get through to an actual agent. They have a website at claimyr.com and there's a demo video at https://youtu.be/7DieNd3C7zQ showing how it works. Might be worth checking out if you need to talk to someone about your specific business situation.

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That's interesting, I'll check it out. Have you used it yourself?

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Yeah, used it when I had questions about my quarterly reports. Way better than sitting on hold for hours.

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Never heard of that before but sounds useful. Washington ESD phone lines are always busy.

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Make sure you understand the difference between state unemployment insurance and federal unemployment tax (FUTA). Washington ESD handles the state portion. You'll also need to register with the IRS for FUTA separately. The state UI rate for new employers in Washington is currently 2.7% on the first $68,500 of each employee's wages.

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Oh wow, I didn't realize there were two separate systems. So I need to register with both Washington ESD and the IRS?

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Correct. Washington ESD for state unemployment insurance, IRS for federal unemployment tax. Two different registrations and filing requirements.

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WAIT why is this so complicated??? I thought starting a business would be easier than this. How am I supposed to know about all these different tax requirements? This is exactly why small businesses fail - too much bureaucracy!!

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I know it seems overwhelming at first, but once you get registered it's pretty straightforward. The quarterly reports aren't too bad.

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I hope so because this is already giving me a headache and I haven't even hired anyone yet

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also make sure you keep track of your payroll records from day one. washington esd will want detailed records if they ever audit you. learned that the hard way

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What kind of records do they want exactly?

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employee names, wages paid, hours worked, dates of employment. basically everything related to payroll

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Good point about record keeping. You're required to maintain payroll records for at least 4 years in Washington.

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Just went through this process myself last month. The online registration took about 20 minutes once I had all my paperwork together. You'll need your business license, EIN, and some basic info about your business activities. They email you the account number within a few days.

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That doesn't sound too bad. What was the hardest part?

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Honestly just finding the right forms on their website. Once I found the business registration portal it was pretty straightforward.

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One thing to be aware of - if you don't register within the required timeframe you might face penalties. Washington ESD doesn't mess around with late registrations.

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How big are the penalties usually?

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Not sure of the exact amounts but I've heard they can add up quickly. Better to register on time than deal with penalties later.

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Also remember that once you're registered, you'll need to file quarterly reports even if you don't owe any taxes. Zero reports are still required to be filed on time.

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So even if I don't have employees for a quarter I still need to file something?

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Exactly. You file a zero report showing no wages paid and no taxes owed, but you still have to file it by the deadline.

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If you do run into issues getting through to Washington ESD for clarification, that Claimyr service I mentioned earlier has been really helpful. They can connect you with agents who can walk through the registration process step by step.

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How much does something like that cost? I'm trying to keep startup costs low.

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It's pretty reasonable for what you get. Way cheaper than hiring a payroll company or accountant just to handle the registration.

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honestly might be worth talking to an accountant about all this tax stuff. mine helped me set up everything correctly from the start and it saved me headaches later

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I've been thinking about that too. Did your accountant charge a lot for the initial setup?

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couple hundred bucks but worth it to know everything was done right. plus they handle my quarterly filings now

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Make sure you understand what constitutes an 'employee' vs 'independent contractor' for UI purposes. Washington has specific rules about this and it affects whether you need to pay unemployment taxes on someone.

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I was planning to hire some people as contractors. Does that mean I don't need to worry about unemployment taxes?

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Not necessarily. Washington ESD has strict criteria for determining if someone is truly an independent contractor. If they decide your 'contractors' are actually employees, you could owe back taxes and penalties.

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This is a really important point. The ABC test in Washington is pretty strict about who qualifies as an independent contractor.

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UGH now I'm worried about the contractor thing too. Why can't they just make this simple?? I just want to hire someone to help with my business!

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Take a deep breath. Lots of businesses navigate this successfully. The key is understanding the rules upfront rather than trying to figure it out later.

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Here's a tip - when you register online, save a copy of your confirmation email and print out your account number. You'll need it for everything going forward and it's easier than trying to look it up later.

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Good advice! I'll make sure to do that.

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Don't forget that Washington is one of the states that also has paid family and medical leave (PFML) through ESD. You might need to register for that too depending on your situation.

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Oh great, another thing to register for. Is that automatic when you register for unemployment insurance?

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No, it's separate. But if you have employees you're probably required to participate in PFML too. Check the Washington ESD website for details.

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Since there are so many different requirements, it might be worth using that Claimyr service to get connected with a Washington ESD specialist who can walk through everything you need to register for. Better to get it all sorted out at once than miss something important.

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That's probably not a bad idea. I'd rather spend a little money upfront than deal with problems later.

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Been running my business for 5 years now and I still remember how overwhelming all this registration stuff was at first. Once you get through it though, the ongoing compliance isn't too bad. Just stay organized and file everything on time.

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Thanks for the encouragement! It helps to hear from someone who's been through it.

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You've got this! Just take it one step at a time and don't be afraid to ask for help when you need it.

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bottom line - get registered as soon as you hire your first employee, keep good records, file your reports on time, and don't try to classify employees as contractors unless you're 100% sure they qualify

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Perfect summary! I think I have a better handle on what I need to do now. Thanks everyone for all the help!

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One final tip - set up calendar reminders for your quarterly filing deadlines. Washington ESD doesn't send reminder notices and late fees add up quickly.

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Will do! I'm going to set those up as soon as I get registered.

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Good luck with your new business! Getting all the tax and compliance stuff set up correctly from the start will save you so much hassle down the road.

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Thank you! I feel much more confident about tackling this now.

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