Is unemployment taxable - Washington ESD benefits and tax implications?

Yes, unemployment benefits are definitely taxable at the federal level. Washington state doesn't have income tax so you don't need to worry about state taxes, but you'll owe federal taxes on everything you received. Washington ESD should send you a 1099-G form in January showing your total benefits for the year.

I made the same mistake my first time on unemployment. The good news is you can request tax withholding on future payments through your Washington ESD account. Log into your account and look for the tax withholding option - I think it's under account settings or payment preferences.

The 1099-G form from Washington ESD usually comes out in late January. Make sure your address is updated in your account so you receive it. You'll need this form to file your taxes - it shows exactly how much you received in unemployment benefits during the tax year.

I've been trying to get through to Washington ESD for weeks to ask about my tax withholding status and other questions about my claim. Their phone lines are always busy and I keep getting disconnected. Has anyone found a way to actually reach someone there?

Wait, I thought there was something about unemployment not being taxable during COVID? Or was that just certain types of benefits?

Pro tip: if you're still receiving benefits, you can change your withholding election online. I recommend having at least 10% withheld for federal taxes. It's better to get a small refund than owe a big amount at tax time.

Don't forget that if you had to pay back any overpayments, that might affect your tax situation too. The 1099-G should show your net benefits after any repayments.

I learned this the hard way my first year collecting unemployment. Ended up owing about $2,800 in federal taxes on my benefits. Now I always have taxes withheld and set aside extra money just in case.

The Washington ESD website has a whole section about taxes and unemployment benefits. It explains how to set up withholding and what forms you'll need. Definitely worth reading through if you're confused about any of this.

Question - if I'm married filing jointly, does my spouse's income affect how much tax I'll owe on my unemployment benefits?

I had a similar situation last year and ended up having to pay quarterly estimated taxes because I owed so much. The IRS can penalize you if you don't pay enough throughout the year.

Just wanted to add that if you're getting other government benefits like food stamps, your unemployment income might affect those too. Worth checking if you're in that situation.

The 1099-G form is really important to keep. Make sure you save it with your tax documents because you'll need it to file your return. Don't just throw it away after filing - keep it for your records.

I was on unemployment for part of 2024 and had taxes withheld, but I'm still worried I didn't have enough taken out. Is there a way to check before I file my taxes?

Does anyone know if Washington ESD automatically sends the 1099-G or do you have to request it? I want to make sure I don't miss it.

This whole thread has been super helpful. I had no idea about the tax implications when I first started collecting unemployment. Definitely going to set up withholding for next year if I need benefits again.

One more thing - if you move during the year, make sure to update your address with Washington ESD so your 1099-G goes to the right place. I had mine go to my old address one year and it was a hassle to get a replacement.

I've been dealing with Washington ESD for months and just realized I never set up tax withholding. Tried calling them multiple times but kept getting disconnected after waiting on hold forever. Finally used Claimyr to get through to an agent who helped me set it up in just a few minutes. Worth every penny to avoid the phone hassle.

For anyone still confused about this - yes, unemployment is taxable income at the federal level. Washington state has no income tax so you don't owe state taxes on it. The key is to either have taxes withheld or set money aside to pay when you file your return.

Just to close the loop on this discussion - I went ahead and set up 10% federal tax withholding on my remaining unemployment payments. Also found the tax information section on the Washington ESD website that someone mentioned. Really comprehensive info there. Thanks everyone for all the helpful advice!

This is such an important topic that many people don't think about until it's too late! I made a similar mistake when I first collected unemployment - didn't realize the benefits were taxable and ended up with a surprise tax bill. One thing I'd add is that you might also want to consider making quarterly estimated tax payments if you think you'll owe a significant amount. The IRS has penalties for underpayment if you don't pay enough throughout the year. You can use Form 1040ES to calculate and make these payments. Also, keep detailed records of all your unemployment payments and any taxes withheld - it makes filing much easier when tax season comes around.