How to calculate unemployment tax - Washington ESD withholding questions

Washington state doesn't tax unemployment benefits, so you're only dealing with federal withholding. The standard rate is 10% if you elected to have taxes withheld. So on $487, that would be $48.70 taken out, leaving you with $438.30. Your numbers sound about right.

Yes, unemployment benefits are fully taxable as income on your federal return. If you didn't elect withholding, you'll need to pay quarterly estimated taxes or face a big bill in April. You can change your withholding election by calling Washington ESD, but good luck getting through.

Washington ESD automatically withholds 10% for federal taxes unless you specifically opt out or choose a different amount. So on $487 that would be about $49 for federal. The rest might be other deductions - did you check your payment history in your SecureAccess Washington account to see the breakdown?

been getting unemployment for 6 months and never thought about taxes until now... am i screwed?

I checked but it just shows the gross amount and net amount. Where do I find the detailed breakdown of what was withheld?

The math is straightforward: Weekly benefit × 0.10 = federal tax withheld. So $487 × 0.10 = $48.70. Your net payment would be $438.30. Washington ESD should show the breakdown on your payment history in your SecureAccess account.

Log into your SAW account and go to Payment Information, then click on the specific payment. It should show federal tax withholding and any other deductions separately.

You can change your tax withholding elections in your Washington ESD account. I had the same issue - they were taking too much out initially. Go to the tax withholding section and you can choose 0%, 10%, or custom amount up to 25% I think.

Thanks! I'll look for that section. Do you know if I can get back the extra they already withheld if I change it now?

I made the mistake of not withholding taxes my first time on unemployment back in 2019. Ended up owing $2,800 at tax time. Now I always elect the 10% withholding even though it means smaller weekly payments.

No, whatever they already withheld stays withheld until you file your tax return. But you can adjust it going forward to prevent overwithholding.

The Washington ESD phone system is absolutely terrible when you need to make changes like updating tax withholding. I spent 3 days trying to get through before giving up and just dealing with owing taxes later.

I've been trying to reach Washington ESD for weeks about my tax withholding issue. Called the main number dozens of times and keep getting hung up on after waiting forever. Has anyone found a better way to get through to an actual person? This is so frustrating.

I had the same problem until I found Claimyr. It's a service that helps you get through to Washington ESD agents. Check out claimyr.com - they have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works. Saved me hours of calling.

Never heard of that before. Is it legit? I'm desperate at this point but don't want to get scammed.

Yeah it's real. They basically handle the calling for you and get you connected to an actual Washington ESD rep. Way better than sitting on hold for hours.

Just want to add that unemployment benefits are fully taxable as income, so you'll definitely owe taxes on them when you file. The 10% withholding might not be enough depending on your total income for the year. You might want to have them withhold more to avoid owing a big chunk next April.

That's what I'm worried about. I was making $65k before I got laid off so I'm probably in a higher tax bracket. Should I have them withhold 20%?

If you were making 65k, yeah 20% might be safer. Better to get a refund than owe taxes you can't pay.

Quick question - do they send a 1099-G at the end of the year showing how much you received and how much tax was withheld? I want to make sure I have the right paperwork for my tax preparer.

PSA: If you're self-employed or have other income while on partial unemployment, the tax situation gets more complicated. You might want to consult a tax professional to avoid surprises.

I disagree - why give the government an interest-free loan? Just set aside the extra money yourself and earn interest on it.

The withholding election is per claim, right? So if I exhaust my current claim and have to file a new one later, I'd need to make the election again?

Wait, you said you got $365 after taxes on a $487 benefit? That's way more than 10% withheld. Something else is going on. Are you sure you don't have any other deductions like child support or overpayment recovery?

Oh wow, I didn't think about that. I do have an old overpayment from 2023 that I've been paying back. That might explain the extra amount taken out.

There you go! Overpayment recovery would definitely explain the higher deduction. Check your account for any active recovery plans.

That makes sense. Washington ESD will automatically deduct overpayment recovery along with taxes. You should see both on your payment detail.

The Washington ESD tax system is so confusing. I accidentally chose 0% withholding when I first filed and now I'm worried I'm going to owe thousands. Anyone know if there's a penalty for not having enough taxes withheld from unemployment?

There can be penalties if you don't pay enough throughout the year. Generally you need to pay 90% of what you owe or 100% of last year's tax liability to avoid penalties.

Ugh, this is stressing me out. I should probably talk to a tax professional.

Quick question - does Washington state have its own unemployment tax that gets withheld? I know we don't have state income tax but wasn't sure about unemployment.

No, Washington doesn't have state income tax so there's no state tax withheld from unemployment benefits. Only federal taxes.

Thanks! That's what I thought but wanted to make sure.

I've been getting unemployment for 8 weeks now and just realized I never set up tax withholding. Is it too late to start having taxes withheld? I'm freaking out about tax season.

No, you can change your withholding anytime. Just log into your SAW account and update your tax elections. It'll apply to future payments.

Thank goodness. I'll do that right now. Better late than never I guess.

Pro tip: you can also make quarterly estimated tax payments if you're worried about not having enough withheld. Use Form 1040ES to calculate what you might owe and send payments directly to the IRS.

That's a good idea. I might do that just to be safe. Thanks for the suggestion.

No problem. I learned this the hard way when I owed $3,000 in taxes from unemployment benefits a few years ago.

Does anyone know if the tax withholding percentage is based on your weekly benefit amount or your total annual unemployment income? I'm trying to figure out if 10% is enough.

It's a flat percentage of each payment, not based on annual income. Whether 10% is enough depends on your total income and tax bracket for the whole year.

Makes sense. I'll probably bump it up to 15% to be safe.

I tried calling Washington ESD about my tax situation but their phone system is absolutely terrible. Spent 3 hours on hold yesterday and got disconnected. Anyone else having better luck reaching them?

I mentioned this earlier but Claimyr really helped me get through. They basically call for you and connect you when they reach an agent. Worth checking out if you're tired of the runaround.

I'll look into that. At this point I'll try anything to get answers.

Just a heads up - if you're collecting unemployment and doing any gig work or freelancing, make sure you're reporting that income AND considering the tax implications. The combination can put you in a higher tax bracket than expected.

Good point. I've been doing some DoorDash while collecting unemployment. Need to make sure I'm tracking all that income.

Exactly. Keep good records because both unemployment and gig income are taxable.

This whole thread is making me realize I have no idea what I'm doing with my unemployment taxes. I've been collecting for 12 weeks and never thought about it until now. Time to log into my account and figure this out.

Better to figure it out now than be surprised at tax time! The good news is it's easy to change your withholding elections in your SAW account.

Yeah, I'm going to set it to 20% just to be super safe. I'd rather get a refund than owe money.

For what it's worth, I used TurboTax last year and it handled the unemployment tax calculations automatically. Just had to enter the total from my 1099-G form that Washington ESD sent me.

When do they send the 1099-G form? Is it automatic or do I need to request it?

They mail it automatically in January. You can also access it online through your SAW account.

Quick update - I found the tax withholding section in my SAW account and changed it from 10% to 18%. Hopefully that'll be enough to cover what I'll owe. Thanks everyone for the help!

Good call. 18% should be plenty for most people. You can always adjust it again if needed.

Exactly. I'd rather overwithhold a bit than be stuck with a big tax bill next April.

I'm still confused about one thing - if I go back to work before the end of the year, do I need to change my withholding again? Or does it not matter since unemployment benefits are still taxable regardless?

The unemployment benefits are taxable regardless of when you go back to work. But your total tax situation will change based on your full year income, so you might want to reassess.

That makes sense. I'll probably leave the withholding as is and just see how things look when I do my taxes.

One more thing to consider - if you're married and your spouse is working, your combined income might put you in a higher tax bracket than you'd expect. Something to factor in when deciding on withholding percentage.

Good point. My wife is still working so our household income is still pretty decent even with me on unemployment.

Yeah, definitely consider that when setting your withholding. You might want to go with 20% or even 25% to be safe.

This has been super helpful. I had no idea there were so many factors to consider with unemployment taxes. Going to spend some time this weekend going through my SAW account and making sure everything is set up correctly.

Smart move. It's definitely worth taking the time to understand how it all works rather than being surprised later.

Absolutely. Thanks to everyone who shared their experiences and advice!

Has anyone used the Claimyr service that was mentioned earlier? I'm still having trouble getting through to Washington ESD about my withholding question and regular calling isn't working.

Yeah, I've used it a couple times now. Really straightforward - you just tell them what you need to discuss and they get you connected to the right Washington ESD department. Saved me tons of time.

That sounds exactly what I need. I'll check out that demo video you mentioned earlier. Thanks!

I tried using one of those phone services to reach Washington ESD about changing my withholding and it actually worked. Got through in like 20 minutes instead of the usual hours of busy signals. The agent was able to update my election right away.

Just want to add that if you're in a low income situation, you might qualify for free tax preparation help through VITA programs. The IRS website has a locator tool to find sites near you.

One thing to watch out for - if you received unemployment in multiple states, each state will send their own 1099-G. Make sure you report all of them on your federal return.

Does anyone know if the calculation changes if you're receiving partial unemployment? Like if my weekly benefit amount varies based on my part-time earnings?

I'm curious about the timing - when does Washington ESD actually send the withheld taxes to the IRS? Is it weekly with each payment or in a lump sum at year end?

Washington ESD's website has a tax information page that explains all this, but like everything else on their site, it's buried and hard to find. Wish they made important info like this more accessible.

Final thought: Keep good records of all your unemployment payments and any taxes withheld. Don't rely solely on the 1099-G in case there are discrepancies. Screenshot your payment history or print it out regularly.