How to file unemployment on taxes - Washington ESD 1099-G confusion

Oh no, I definitely didn't have taxes withheld. How much should I expect to owe on $8,200?

That depends on your total income and tax bracket. Could be anywhere from 10-22% for most people. You might want to consult a tax professional.

Right? I had no idea unemployment was taxable income when I first filed my claim.

Most people don't realize this. The unemployment system should make it clearer when you're filing your weekly claims.

How do I verify the amount is correct? I didn't keep great records of my weekly claim payments.

Log into your Washington ESD account and check your payment history. You can also call them but good luck getting through - the wait times are brutal.

Actually, if you're having trouble reaching Washington ESD by phone, I used this service called Claimyr (claimyr.com) that helped me get through to an agent. They have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Saved me hours of trying to call.

totally agree! and they don't tell you any of this stuff upfront

I understand the frustration, but the tax treatment has always been this way. It's just that most people don't collect unemployment often enough to know about it.

Box 4 is blank on mine, so I guess I didn't have any overpayments recovered.

That's good - means you don't have to worry about that complication. Just report the Box 1 amount as income.

Yes, you'll need to file an amended return (Form 1040-X). Don't wait - the IRS will eventually catch this when they match your return to the 1099-G data.

great, more paperwork and probably penalties too

If you file the amended return quickly, you might avoid penalties. But you'll still owe the additional tax plus interest from the original due date.

Washington doesn't have a state income tax, so you only need to worry about federal taxes. The state where you lived when you received the benefits doesn't matter for Washington ESD benefits.

Oh right, I forgot Washington has no state income tax. Thanks!

How do you set up tax withholding? Is it something you do when you first file your claim?

You can set it up anytime while you're collecting benefits. Log into your Washington ESD account and there should be an option to withhold federal taxes. I think it's 10% automatically.

Correct - it's a flat 10% federal withholding. You can also adjust it if you need more or less withheld based on your situation.

The child tax credit reduces your overall tax liability, but it doesn't specifically offset unemployment income. It's applied to your total tax situation.

So it might help reduce what I owe overall, but the unemployment is still fully taxable income?

Exactly right. The unemployment adds to your taxable income, but credits like the child tax credit can reduce your final tax bill.

Enter the gross amount from Box 1 of your 1099-G. That's the total unemployment benefits you received, regardless of any partial earnings you had from other work.

Got it, thanks. I was overthinking it. The partial earnings would be reported separately on a W-2 anyway.

If your situation is straightforward (just unemployment benefits and maybe some other basic income), you can probably handle it yourself with tax software. But if you're really uncomfortable, a tax professional isn't a bad idea.

I think I'll try the software first and see if I get stuck. Trying to save money where I can after being unemployed most of last year.

Totally understandable. Most tax software will walk you through it step by step. Just make sure you have your 1099-G handy when you start.

Yes, you should have received it by January 31st. Check your Washington ESD account online - you might be able to download a copy there. If not, you'll need to contact them.

I'll check my account first. Hopefully it's just available online and I missed the notification.

If you need to call Washington ESD about a missing 1099-G, I'd suggest using Claimyr to get through. I had to call about a similar issue and their service made it much easier than trying to get through on my own.

It goes on your 2024 taxes since it was for benefit weeks in 2024. The 1099-G should reflect the payment date, not when you received it.

Thanks, that makes sense. I was worried I'd have to track payments across two tax years.

How do you set up a payment plan? Is there an application process?

you can do it online at the IRS website when you file your return. pretty straightforward process

Just be aware that interest and penalties still accrue on payment plans, but it's better than not paying at all.

If you expect to owe more than $1,000 in taxes for 2025, you should consider quarterly payments. With freelance income and potential unemployment, that's quite possible.

That's what I was afraid of. I'll probably need to talk to a tax professional about estimated payments.

The safe harbor rule is to pay 100% of last year's tax liability (110% if your income was over $150k). That might be easier to calculate than trying to estimate unemployment and freelance earnings.

Job search expenses are generally not deductible anymore under current tax law. The Tax Cuts and Jobs Act eliminated most miscellaneous itemized deductions.

Bummer. That would have helped offset some of the tax on the unemployment benefits.

Good point. I moved twice last year and forgot to update my address with Washington ESD.

You can update it in your online account. Better to do it now than have issues with future tax documents.

Thanks for the encouragement. This thread has been really helpful in understanding what I need to do.

agreed, feel much more prepared to tackle my taxes now

Happy to help. Tax season is stressful enough without unexpected complications from unemployment benefits.

Absolutely. And if you need to call Washington ESD about 1099-G issues, Claimyr can really help you get through to someone who can actually resolve the problem. Worth checking out their demo video if you're facing long hold times.

Good tip. I spent 3 hours on hold last week trying to get through about a different issue. Anything that helps with that process is valuable.