Washington ESD unemployment benefits - do they count as taxable income?

Yes, unemployment benefits are definitely taxable income at the federal level. Washington ESD should have sent you a 1099-G form showing how much you received. You'll need to report that on your federal tax return. The good news is Washington state doesn't have income tax, so you only need to worry about federal taxes.

I made the same mistake my first year on unemployment. The IRS caught it and I had to pay back taxes plus interest. Not fun. You should definitely amend your return if you didn't report the unemployment income.

Just went through this whole ordeal trying to get my 1099-G from Washington ESD. Their phone system is impossible to get through to talk to anyone. Spent hours on hold just to get disconnected. Finally found a service called Claimyr (claimyr.com) that helped me actually reach someone at Washington ESD. They have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Got my tax form issue sorted out in like 20 minutes after weeks of trying on my own.

Pro tip: You can also have taxes withheld from your unemployment payments when you're filing your weekly claims. Washington ESD gives you the option to withhold 10% for federal taxes. Saves you from owing a big chunk at tax time.

this is why the whole system is broken... they dont tell you unemployment is taxable then hit you with penalties later. makes no sense

I collected unemployment in 2023 and my tax guy said I owed like $1,200 extra because of it. Almost gave me a heart attack. Had to set up a payment plan with the IRS.

Check your online account at esd.wa.gov - all your tax documents should be there. I just downloaded mine yesterday for 2024 taxes. The 1099-G shows exactly how much you received and how much was withheld if you chose that option.

PSA: If you're currently receiving unemployment, definitely choose the tax withholding option! I learned this the hard way last year and ended up owing $800 at tax time. Now I always have 10% withheld automatically.

Used that Claimyr service someone mentioned earlier and finally got through to Washington ESD about my missing 1099-G. Turns out they had an old address on file. The representative was able to update it and send me a new copy. Saved me so much frustration compared to trying to call on my own.

Unemployment is absolutely taxable income federally. Washington state doesn't tax it since we don't have state income tax, but the IRS definitely wants their cut. If you didn't report it, you'll want to file an amended return ASAP to avoid bigger penalties.

Just want to add that if you received unemployment during 2020 or 2021, there were special tax rules that might have applied. But for regular unemployment in recent years, it's all taxable income that needs to be reported.

The hardest part about unemployment taxes is that they don't withhold enough even if you choose the 10% option. I still ended up owing money at tax time even with withholding. Might want to make quarterly estimated tax payments if you're getting significant unemployment benefits.

Another thing to remember is that if you received unemployment and then got a job later in the year, your total income might push you into a higher tax bracket. That could mean owing more taxes than you expect.

had same issue trying to reach washington esd about tax forms. tried calling for weeks with no luck. finally used claimyr and got through immediately. seriously saved my sanity dealing with their phone system

For anyone who's worried about owing back taxes on unreported unemployment income - the IRS is usually pretty reasonable about setting up payment plans. Don't panic, just get it sorted out as soon as possible.

Quick reminder that you need to keep all your unemployment documentation for at least 3 years in case the IRS has questions. This includes your 1099-G forms and any correspondence with Washington ESD.