Washington ESD unemployment benefits - are they taxable in WA state?

Washington state doesn't have a state income tax at all, so you don't need to worry about state taxes on your unemployment benefits. You'll still owe federal taxes on the unemployment income though.

Just federal taxes apply. Washington ESD should have given you the option to have federal taxes withheld when you filed your claim. Did you elect to have taxes taken out?

You're smart to think about this early! If you didn't elect withholding, you'll want to set aside about 10-22% of your benefits for federal taxes depending on your total income for the year. Washington ESD will send you a 1099-G form in January.

If you're having trouble accessing your Washington ESD account to check your withholding status, I had luck using claimyr.com to get through to an actual agent. They have this video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Way easier than trying to call Washington ESD directly.

i didnt elect withholding and now im worried about owing a huge amount next year. can you change the withholding after youve already filed?

The federal tax rate on UI benefits is the same as your regular income tax rate. So if you're in the 12% bracket normally, that's what you'll pay on unemployment too.

Just make sure you report all your unemployment income when you file taxes. The IRS gets a copy of your 1099-G from Washington ESD so they'll know if you don't report it.

I made the mistake of not having taxes withheld last year and ended up owing about $800 at tax time. Definitely recommend electing withholding if you can afford the smaller weekly payments.

Another option is to make quarterly estimated tax payments to the IRS if you don't want withholding taken out of your weekly benefits. That way you're not hit with a big bill in April.

Washington really is nice not having state income tax. When I lived in Oregon before moving here, they taxed unemployment benefits at the state level too.

If anyone needs help getting through to Washington ESD to change their withholding, I used Claimyr recently and it worked great. Saved me probably 3 hours of calling and getting busy signals.

The 1099-G form from Washington ESD will show exactly how much you received in unemployment benefits and how much federal tax was withheld if any. Keep that form safe for tax filing.

One thing to remember is that if you received unemployment in 2024 and then get a job, you might end up in a higher tax bracket than usual. Something to consider when planning.

if youre really struggling financially you might qualify for free tax prep through VITA or other programs, just so you know you have options

I used Claimyr when I needed to ask Washington ESD about my 1099-G form last year. The agent was able to explain exactly what was included in my unemployment total and why. Really helpful service.

Don't forget that if you received unemployment benefits, you might also be eligible for certain tax credits like the Earned Income Tax Credit depending on your total income for the year.

Washington ESD's website has some basic tax info about unemployment benefits if you want to read more about it. Not super detailed but covers the basics.

Just want to reiterate - no Washington state taxes on unemployment, but definitely federal taxes apply. Set aside money if you didn't elect withholding!

glad you asked this question OP, i was wondering the same thing but kept forgetting to look it up

The key takeaway: Washington state = no state income tax on anything including unemployment. Federal = yes, you owe taxes on UI benefits just like regular income. Plan accordingly!