Is unemployment compensation taxable income for Washington ESD benefits?

Oh no, I don't remember being asked about tax withholding. Is it too late to change that setting?

You can change your withholding election by logging into your Washington ESD account online. Look for tax withholding options in your profile settings.

Wow $1800! That's terrifying. I wish someone had warned me about this earlier.

The standard federal withholding rate for unemployment is 10%, but depending on your total income for the year you might owe more or less than that.

I had the same problem until I found Claimyr.com - it's a service that calls Washington ESD for you and gets you connected to an actual agent. I was able to update my tax withholding in like 15 minutes after being on hold for months trying to call myself. There's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

That sounds too good to be true, does it actually work?

Yeah I was skeptical too but it really worked. Way better than sitting on hold for hours just to get disconnected.

Good to know about the 1099-G form. Will that be mailed to me or available online?

Both - they'll mail it and you can also access it online through your Washington ESD account. Make sure your address is current so you don't miss it.

That was only for 2020 - the first $10,200 of unemployment compensation was excluded from federal taxes that year. That doesn't apply anymore for 2024 and 2025.

Oh darn, I was hoping that was still a thing. Thanks for clarifying!

Yes, and you should also consider making quarterly estimated tax payments for the benefits you've already received without withholding. Talk to a tax professional if you're unsure about the amounts.

The IRS website has an estimated tax calculator that can help you figure out if you need to make quarterly payments to avoid penalties.

Don't panic, just start planning now. Calculate roughly 10-12% of what you've received and either set it aside or make an estimated payment.

That's actually really helpful advice. I'll start setting aside money from each payment going forward.

Perfect, I'll check that out tonight. Thanks everyone for the help!

Good point, I am married so I should probably calculate this more carefully.

Yes, definitely look at your total household income when planning for taxes on unemployment benefits.

Standard deductions still apply, and if you're job searching you might be able to deduct some job search expenses, but unemployment compensation itself is fully taxable income.

Thanks, that's what I figured but wanted to double check.

Okay you've convinced me, I'm going to try this Claimyr thing. Anything is better than the endless busy signals.

Yeah it's pretty straightforward, just go to claimyr.com and set it up. Way less frustrating than dealing with Washington ESD's phone system directly.

That's smart advice. I should probably start tracking this stuff now.

It depends on your total income for the year, but yes, you should definitely plan on owing federal taxes on your unemployment compensation.

this is awful, i can barely afford groceries as it is

You can still set up tax withholding going forward, and look into payment plans with the IRS if needed when you file your return.

True, that's one thing we have going for us in Washington!

I agree, it should be part of the initial application process to ask about tax withholding preferences.

Exactly, too many people get surprised by this at tax time.

How much does something like that cost though?

It's worth checking out their site for current info, but honestly it was worth whatever it cost just to avoid the frustration of never getting through.

Glad I'm not the only one who didn't realize this! At least we're figuring it out now instead of next April.

Perfect summary, thanks! This thread has been incredibly helpful.

Bookmarking this thread, great info all around.