Washington ESD unemployment benefits - how does unemployment affect taxes filing?

Yes, unemployment benefits are considered taxable income at the federal level. The 1099-G you received from Washington ESD shows the total amount you received in 2024. You'll need to report this on your tax return just like regular wages. The good news is Washington state doesn't have a state income tax, so you only worry about federal taxes on your UI benefits.

I was in a similar situation last year. One thing to be aware of - if you didn't have taxes withheld from your Washington ESD payments, you might owe money when you file. When you filed your weekly claims, there should have been an option to have federal taxes taken out automatically.

Had this exact same issue when I was on unemployment for 8 months. The Washington ESD system is terrible for explaining the tax implications. I spent hours trying to get through to someone who could explain how the 1099-G worked. Finally found out about claimyr.com which helped me actually reach a Washington ESD agent who could walk me through the tax withholding options. They have a video demo at https://youtu.be/7DieNd3C7zQ that shows how their callback system works.

The tax bracket concern you mentioned is a common misconception. Tax brackets are marginal, meaning only the income above each threshold gets taxed at the higher rate. Your unemployment benefits won't suddenly make all your income taxed at a higher rate - just the portion that pushes you into the next bracket if any.

ugh this is why i hate doing taxes... got my 1099-g from washington esd but its confusing as hell. why cant they just make this stuff simple?

Pro tip: if you're using tax software like TurboTax or H&R Block, they have specific sections for unemployment income. Just enter the amount from Box 1 of your 1099-G when it asks about unemployment compensation. Don't overthink it.

One thing to watch out for - make sure the amount on your 1099-G matches what you actually received. I had an issue where Washington ESD's 1099-G was wrong by about $800. Had to call them to get a corrected form.

If you're worried about owing money, you can make estimated tax payments now before the filing deadline. Or if you get a refund from other sources, it might offset what you owe on the unemployment income.

Been through this twice now with Washington ESD unemployment. The 1099-G form comes in late January/early February usually. Make sure you wait for it before filing your taxes or you'll have to amend your return later.

Also worth noting - if you received any overpayment notices from Washington ESD and had to pay money back, that affects your taxable amount too. The 1099-G should reflect the net amount you actually kept, but double-check if you had any overpayment issues.

washington esd should really explain this tax stuff better when you first apply. i had no idea unemployment was taxable until i got the 1099-g form

Quick reminder - if you move to a different state during the year, you might need to file tax returns in multiple states. But since Washington doesn't have state income tax, you're probably fine unless you moved FROM Washington to a state with income tax.

so bottom line - just report the unemployment money as income on your taxes and be prepared to possibly owe some money if you didnt have taxes withheld?

I used to work in tax prep and saw this situation all the time. The key thing people miss is that unemployment benefits are taxed as ordinary income, not at some special rate. Same tax treatment as your regular paycheck.

One more tip - if you end up owing money, the IRS has payment plan options. Don't stress too much if you can't pay it all at once. But definitely file your return on time even if you can't pay immediately.

had similar experience with washington esd and taxes last year. ended up using a tax professional because i was confused about how to handle the unemployment income. cost me $200 but was worth the peace of mind

For anyone else reading this - you can also check your online Washington ESD account to see a summary of all payments made to you during the year. Helpful for double-checking the 1099-G amount.

Final thought - if this is your first time dealing with unemployment taxes, consider it a learning experience for the future. Next time you can plan better by having taxes withheld upfront.

this whole thread has been really educational. i'm in a similar situation with washington esd unemployment and taxes so thanks everyone for sharing your experiences

Just wanted to add that if you received unemployment from multiple states (like if you moved), the tax situation gets more complicated. But since you only dealt with Washington ESD, you're in good shape.