Washington ESD federal unemployment withholdings - confused about taxes
I'm really confused about the tax situation with my Washington ESD unemployment benefits. I've been getting weekly payments for about 6 weeks now and I'm wondering about federal unemployment withholdings. Do I need to have taxes taken out automatically or can I handle this myself when I file? I see there's an option in my account but I'm not sure what to choose. Also, will Washington ESD send me some kind of tax form at the end of the year? This is my first time on unemployment and I don't want to mess up my taxes.
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Yara Sabbagh
Yes, you have the option to have federal taxes withheld from your unemployment benefits. It's 10% automatically if you choose withholding. You'll get a 1099-G form from Washington ESD in January showing all your benefits for the tax year.
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Connor O'Brien
•Thanks! So if I don't do the withholding, I'll owe the full amount when I file my taxes next year?
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Yara Sabbagh
•Exactly. Unemployment benefits are fully taxable as income, so you'll need to pay either way - either through withholding or when you file.
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Keisha Johnson
I learned this the hard way last year. Didn't have anything withheld and ended up owing like $1,200 at tax time. Definitely recommend having the withholding if you can afford the slightly smaller weekly payments.
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Connor O'Brien
•Wow, that's a lot! I think I better turn on the withholding then. Better safe than sorry.
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Paolo Rizzo
•Same thing happened to me. The 10% withholding might not even be enough depending on your tax bracket, but it helps.
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QuantumQuest
You can change the withholding option anytime through your Washington ESD account. Just log into your SecureAccess Washington profile and look for the tax withholding section. I've had to call Washington ESD about this before and their agents are actually pretty helpful with tax questions.
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Amina Sy
•How long did it take you to get through when you called? I've been trying to reach someone for weeks about my claim status.
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QuantumQuest
•I actually found this service called Claimyr that helps you get through to Washington ESD agents faster. Check out claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Saved me hours of trying to call.
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Oliver Fischer
wait so unemployment is taxable? i thought it was like welfare or something??
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Yara Sabbagh
•No, unemployment benefits are fully taxable income for federal purposes. Washington state doesn't have income tax so no state taxes, but you definitely owe federal.
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Oliver Fischer
•oh crap ive been on UI for 3 months and never set up withholding... am i screwed?
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QuantumQuest
•You can still turn it on now for future payments, and just set aside money for what you've already received. Better late than never.
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Natasha Petrova
The whole tax thing with unemployment is such a pain. They should just make it automatic withholding instead of making people choose. Half the people don't realize unemployment is taxable until tax season.
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Connor O'Brien
•I agree! I almost didn't even know to ask about this. Good thing I'm checking now instead of finding out next April.
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Javier Morales
•At least Washington ESD gives you the option. Some states make it really hard to set up withholding.
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Paolo Rizzo
Pro tip: if you're married and your spouse is still working, you might want to increase their withholding at work instead of or in addition to the unemployment withholding. Sometimes that works out better tax-wise.
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Connor O'Brien
•That's smart! I hadn't thought about adjusting my husband's withholding. Thanks for the suggestion.
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Emma Davis
•Yeah, or you could make quarterly estimated tax payments if you want more control over the timing.
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GalaxyGlider
I've been having the maximum withheld since day one. Rather get a refund than owe money. My weekly benefit is $487 so with 10% withheld I get $438.30 each week.
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Connor O'Brien
•That's not too bad of a reduction. I think I'm going to go ahead and set up the withholding today.
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Malik Robinson
•Same approach here. The peace of mind is worth the smaller weekly payment.
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Amina Sy
Does anyone know if the 1099-G form gets mailed automatically or do you have to request it? I moved since I started my claim and I'm worried about not getting important tax documents.
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Yara Sabbagh
•It gets mailed automatically to your address on file. Make sure to update your address in your Washington ESD account if you've moved.
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Amina Sy
•Thanks! I better call and update my address then. I've been having trouble getting through to Washington ESD though.
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Isabella Silva
•Try using Claimyr to get through faster. I used it last month and got connected to a real person in like 15 minutes instead of waiting hours. Worth checking out.
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Ravi Choudhury
One thing to watch out for - if you have other income during the year (like a new job), the flat 10% withholding on unemployment might not be enough. You could still end up owing at tax time.
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Connor O'Brien
•Good point. I'm hoping to find a job soon so I'll keep that in mind. Maybe I should talk to a tax person.
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Freya Andersen
•Yeah, the 10% is really just a bare minimum. If you're in a higher tax bracket it won't cover everything.
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Omar Farouk
I wish I had seen this thread earlier! I just did my taxes and owed $900 because I didn't have anything withheld from my unemployment last year. The tax software didn't even warn me that unemployment would be taxable.
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Connor O'Brien
•Ouch! That's exactly what I'm trying to avoid. Thanks for sharing your experience.
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CosmicCadet
•Most people don't realize unemployment is taxable until it's too late. It should be more clearly explained when you file your initial claim.
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Chloe Harris
Just to add - the 1099-G will also include any overpayments you had to pay back during the year, which reduces your taxable income. So keep track of any overpayment notices from Washington ESD.
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Connor O'Brien
•That's helpful to know. I haven't had any overpayments thankfully, but good to be aware of.
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Diego Mendoza
•Yeah, I had to pay back $200 last year due to an error and it showed up on my 1099-G as a reduction.
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Anastasia Popova
For anyone still reading this - you can also check your year-to-date withholding amounts in your Washington ESD account. It's under the payment history section. Helps you keep track of how much has been withheld for taxes.
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Connor O'Brien
•Perfect! I'll check that out when I log in to set up my withholding. Thanks everyone for all the helpful advice.
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Sean Flanagan
•This thread has been super helpful. I'm going to go turn on withholding right now too.
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