Washington ESD unemployment benefits taxable - does tax unemployment benefits affect my refund?

Yes, unemployment benefits are generally taxable income at the federal level. You should have received a 1099-G form from Washington ESD showing the total amount you received. You'll need to report this on your tax return just like any other income.

wait i thought unemployment wasnt taxed?? i never paid taxes on mine last year

I had the same confusion! When I was trying to get answers about this from Washington ESD, I couldn't get through on their phone lines for weeks. Finally used Claimyr to actually reach someone who confirmed that yes, all UI benefits are taxable. The service helped me get connected to an agent who explained the 1099-G form. You can check out their demo at https://youtu.be/7DieNd3C7zQ if you need to talk to Washington ESD about tax questions.

This is so frustrating! Why don't they make this clearer when you're filing for benefits? I had no idea I'd owe taxes on unemployment money.

For future reference, you can have 10% federal income tax withheld from your unemployment benefits when you file your weekly claims. This helps avoid a big tax bill at the end of the year. You can change this setting in your SecureAccess Washington account.

The whole tax system is rigged against working people! They tax your regular income, then when you lose your job and need help, they tax that too. It's ridiculous!!

same boat here, got my 1099-G and was shocked at the amount. had no idea this was coming

One important thing to note: Washington state doesn't have income tax, so you only need to worry about federal taxes on your unemployment benefits. That's one advantage of living here versus other states.

I'm a tax preparer and see this confusion every year. Yes, unemployment benefits are fully taxable at the federal level. Make sure you report the full amount from your 1099-G. If you can't afford to pay the full amount owed, the IRS has payment plan options.

This happened to my sister last year and she ended up owing like $1500 in taxes on her unemployment. She had to use part of her refund from other sources to cover it.

Just want to follow up on my earlier comment about Claimyr - if anyone needs to speak with Washington ESD about tax withholding or 1099-G questions, you can check them out at claimyr.com. Really saved me a lot of frustration trying to get through to someone.

I learned this the hard way my first year on unemployment. Now I always have them withhold the 10% federal tax so I don't get hit with a big bill. Live and learn I guess.

WAIT so if I made $15,000 in unemployment last year I have to pay taxes on ALL of that?? This is insane!

The 1099-G form from Washington ESD should show exactly how much you received in box 1. That's the amount you need to report on your tax return. Don't forget to keep this form with your tax documents.

This is why I always tell people to have taxes withheld from unemployment. It's not fun getting hit with a big tax bill when you're already dealing with financial stress from being unemployed.

my accountant said something about unemployment being different during covid years but i dont really understand it

I had to deal with this same situation and honestly, calling Washington ESD for clarification was a nightmare. I tried for days to get through. Eventually I found out about Claimyr and they helped me connect with an agent who walked me through the tax implications. Worth checking out if you need to talk to someone at Washington ESD about this stuff.

Just to summarize for anyone else reading this thread: Yes, unemployment benefits are taxable income. You'll get a 1099-G form from Washington ESD. Report the full amount on your tax return. You can have 10% federal tax withheld from future claims to avoid owing money next year.

ugh this whole thing is giving me anxiety. i thought unemployment was supposed to help not create more financial problems

Pro tip: if you're currently receiving unemployment benefits, log into your SecureAccess Washington account and set up the 10% federal tax withholding NOW. Don't wait until next year to deal with this.