How to pay federal unemployment tax - Washington ESD employer requirements

So I need to pay both federal and state unemployment taxes? That seems like double taxation.

Yes, but the federal rate drops significantly with the state credit. Washington ESD handles the state portion.

How do I know if I owe more than $500? Is there a calculator somewhere?

Take your total wages subject to FUTA (first $7k per employee) and multiply by 0.6%. If that's over $500, you need quarterly deposits.

Washington ESD only handles state unemployment insurance. Federal unemployment tax is completely separate and goes to the IRS.

Thanks, that clears it up. So two different systems entirely.

Is that mainly for people filing claims or does it help with employer stuff too?

They focus on helping people reach Washington ESD agents, but understanding the system from both sides really helped me as an employer.

Do I need to set up some kind of account with the IRS for this?

You'll use your EIN (employer identification number) that you should already have. Payments can be made through EFTPS.

I think I already got something from Washington ESD but I wasn't sure what it was for.

yeah that's probably your state unemployment tax rate assignment. you need both federal and state coverage

That's a relief - I was worried I'd have to pay on their entire salary all year long.

Nope, it caps at $7k per employee. State unemployment tax in Washington might have different wage bases though.

So this actually helps my employees if they ever need unemployment benefits?

Exactly. It's part of the safety net system. Your state taxes through Washington ESD fund most benefits, but FUTA provides federal backing.

That's smart. I should probably open a separate account for tax payments.

Definitely recommend it. Makes quarterly payments much less stressful when the money is already set aside.

Wow, that's a huge difference. So staying current with Washington ESD payments is crucial.

Absolutely. Being late on state payments makes your federal tax 10 times higher.

I'll look that up. Are there any other resources you'd recommend?

The Washington ESD website has good employer resources too for the state side of things.

Good to know, though I just have regular business employees.

Yeah, most businesses follow the standard rules. Just mentioning it since some people get confused about household workers.

How does that work exactly? Do they call for you?

They help you get through the phone system more efficiently. Check their demo video - it shows how they navigate the Washington ESD phone maze.

Is there a fee for using EFTPS?

No, it's free. Much better than mailing checks or using third-party payment services that charge fees.

I started from scratch so that shouldn't apply to me, but good point.

Yeah, for new businesses it's straightforward. Just mentioning it since mergers and acquisitions can complicate things.

I should probably register for that. Is it the same login as the regular Washington ESD site?

no it's separate from the employee side. you'll need to register as an employer specifically

So there's a grace period if I stay current on quarterly payments?

Exactly. It's an incentive to make timely quarterly deposits throughout the year.

I've been thinking about that. Do you have any recommendations?

There are lots of options - ADP, Paychex, Gusto, etc. Shop around and compare features and pricing.

How long should I keep these records?

IRS recommends keeping employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.

Thanks everyone! This has been incredibly helpful. I feel much more confident about handling these requirements now.

You're welcome! It seems overwhelming at first but becomes routine once you get the systems set up.