Is unemployment considered wages for tax purposes in Washington ESD claims?

Oh that makes sense! I did get a 1099-G form but wasn't sure what to do with it. So I report it as income but not wages on my tax return?

Exactly! It goes on your 1040 as other income, not in the wages section. If you had taxes withheld from your weekly claims, that will also show on the 1099-G.

Unfortunately unemployment benefits became fully taxable again after 2021. During 2020 there was a temporary exclusion but that ended. You might owe taxes on what you received if you didn't have withholding.

oh no... that's going to be a huge tax bill. wish washington esd made this clearer when i filed my claim

That's really helpful! I think I have been having 10% withheld but I should double check my account to make sure.

How do you change the withholding setting? I can't find it in my account

You can update it when you file your weekly claim - there should be a section asking about tax withholding. You can also call Washington ESD to change it but good luck getting through to them!

I actually found a service called Claimyr that helped me get through to Washington ESD when I needed to sort out my tax issues. They have this system that calls for you and connects you when an agent picks up. Check out claimyr.com - they even have a demo video at https://youtu.be/7DieNd3C7zQ showing how it works.

Interesting, is it legit? I'm desperate at this point but don't want to get scammed.

Yeah it's real, I used it last month when I had an adjudication issue. Way better than spending hours on hold just to get disconnected.

Good point! So I won't earn Social Security credits from unemployment benefits like I would from actual wages?

Correct, unemployment doesn't count toward your Social Security earnings record. Only wages from employment do that.

I know right? The whole system is set up to confuse people. Half the time I don't even understand what they're asking for in the weekly claims.

To be fair, they do mention tax implications in the handbook they give you when you file. But I get that it's easy to miss with all the other information.

That's smart advice. I think I'll increase my withholding just to be safe.

ugh wish i had thought of this months ago. now i have to figure out how to pay a huge tax bill

You might be able to set up a payment plan with the IRS if you can't pay it all at once. Don't panic, there are options.

It comes automatically if you received benefits during the tax year. Should be mailed to your address on file with Washington ESD by the end of January.

Great, thanks! I was worried I'd have to hunt it down.

Ouch! That's exactly what I'm trying to avoid. Definitely keeping my withholding in place.

this is making me so anxious about what i'm going to owe...

Don't stress too much - you can always adjust your withholding going forward and maybe increase it a bit to catch up.

Which software do you use? I usually do my own taxes but this unemployment stuff is making me nervous.

I use TurboTax but I think most of the major ones handle unemployment benefits pretty well. They'll import your 1099-G automatically if you want.

Yes, you'll get a 1099-G for whatever unemployment benefits you received, even if it was partial benefits. Your employer will also send you a W-2 for the wages you earned.

Thanks! So I'll have both forms to deal with at tax time.

Good to hear another success story! I'm definitely going to try it next time I need to call.

How much does it cost? I'm hesitant to pay for something that should be free.

I get the hesitation but honestly my time is worth more than sitting on hold for hours. Plus you're guaranteed to actually reach someone.

Same here! I'm glad I asked about this now rather than being surprised at tax time.

Yeah this is why forums like this are so valuable. The official Washington ESD info is so hard to understand sometimes.

Good point! I only got benefits from Washington ESD so I just have the one form to worry about.

I moved during my unemployment period - do I need to notify Washington ESD of my address change for tax purposes?

Yes definitely update your address with Washington ESD so your 1099-G gets mailed to the right place. You can do it online in your account.

Absolutely! I feel much more confident about handling my taxes now.

Same here. Going to check my withholding settings right now.