Washington ESD unemployment benefits taxed - confused about tax withholding options

Yes, unemployment benefits are taxable at the federal level. Washington state doesn't have income tax so you don't worry about state taxes, but the IRS treats UI payments as regular income. You can change your withholding election anytime by logging into your Washington ESD account.

I learned this the hard way last year - owed like $1,200 when I filed my taxes because I didn't have anything withheld. Definitely recommend having them take out the 10% federal tax if you can afford the smaller weekly amount.

If you're having trouble reaching Washington ESD to change your withholding, I had good luck using claimyr.com recently. They help you get through to an actual person at ESD instead of dealing with the phone system that hangs up on you. There's a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

wait unemployment is taxed?? nobody told me this when i signed up. this is bs why would they tax money they give you when you dont have a job

Pro tip: even if you have taxes withheld, keep track of how much you receive total throughout the year. You'll get a 1099-G form in January but it's good to have your own records too.

The withholding is 10% federal tax. So if you're getting $500/week, they'd withhold $50 and you'd get $450. You can turn this on/off whenever you want through your SecureAccess Washington account.

I'm in the same boat - didn't elect withholding and now I'm panicking about next tax season. How much do you typically owe if you don't have taxes withheld?

Does anyone know if there are penalties for not having enough tax withheld during the year? I'm worried about owing too much when I file.

been on unemployment twice and both times forgot about the tax thing until it was too late. at least washington esd makes it easy to change your withholding online, not like some states where you have to mail forms

Another option is to set aside money yourself each week instead of having ESD withhold. I put 15% of each payment into a separate savings account for taxes. Gives you more control and you earn a little interest.

I had issues accessing my ESD account to change withholding and used that Claimyr service someone mentioned earlier. Worked great - got connected to an ESD rep in like 10 minutes instead of the usual phone tree nightmare. They changed my withholding right on the call.

One thing to remember is that if you do odd jobs or gig work while on unemployment, that income is also taxable and you need to report it to ESD. Can affect both your UI eligibility and your total tax situation.

The 1099-G you get from Washington ESD in January will show exactly how much you received in benefits for the year. Make sure the amount matches your records before you file your taxes.

i wish they explained this stuff better when you first apply. the whole unemployment system is confusing enough without having to worry about taxes too

If anyone else is struggling to get through to ESD about withholding changes, I also used Claimyr recently. Much easier than the regular phone system. The rep I talked to was really helpful and explained everything clearly.

Just to clarify - the 10% withholding is only for federal taxes. Some people get confused and think it covers all their tax liability, but depending on your bracket you might still owe more.

Been dealing with unemployment taxes for years now (unfortunately). Best advice is to treat the benefits like any other income and plan accordingly. If you normally get a refund, having taxes withheld might just reduce your refund rather than creating a big bill.

Don't forget that if you have multiple jobs during the year or your spouse works, the unemployment income could push you into a higher tax bracket. Something to consider when deciding on withholding.

The good news is that unemployment benefits are at least consistent income, so it's easier to plan for taxes compared to irregular freelance work. Just decide on a strategy and stick with it.

Final tip: keep all your ESD correspondence and payment records organized in case you need them for tax prep. Makes everything much easier when April rolls around.