Washington ESD unemployment tax - do I owe taxes on my benefits?

Yes, unemployment benefits are considered taxable income by the IRS. Washington ESD should have sent you a 1099-G form showing the total amount you received. You can request to have 10% federal taxes withheld from future payments by logging into your SecureAccess Washington account and updating your tax withholding preferences.

oh no i didnt know this either!! ive been getting benefits since july and never set up tax withholding. am i going to owe thousands of dollars??

I had the same situation last year. What helped me was using Claimyr to actually get through to a Washington ESD agent who explained the tax withholding options. The website is claimyr.com and they have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Much easier than trying to call Washington ESD directly and getting hung up on.

The tax situation is honestly one of the most confusing parts of unemployment. Washington state doesn't have income tax but you still owe federal taxes on UI benefits. I wish they explained this better when you first apply for benefits.

You can set up tax withholding at any time through your Washington ESD online account. Go to 'Manage Tax Withholding' and select either 10% federal withholding or no withholding. If you're worried about owing money, it's better to have taxes taken out of your remaining payments.

been there done that with the tax surprise. last year i owed like $1800 because i had no withholding on my unemployment. this year im having the 10% taken out automatically

One thing to remember is that if you had taxes withheld from previous jobs earlier in the year, that might cover some of what you'll owe on unemployment. Check your last paystub to see your year-to-date federal withholding.

THE WHOLE TAX SYSTEM IS RIDICULOUS! You lose your job and then they want to tax the tiny amount of money they give you to survive. Makes no sense to me.

Make sure you keep all your records from Washington ESD including your payment history. You'll need that information when you file your taxes even if you don't get the 1099-G form right away.

If you're really worried about the tax bill, consider making estimated quarterly payments for the rest of the year. You can do this online through the IRS website using Form 1040ES.

i had no idea about quarterly payments. does that mean i should have been paying taxes every 3 months while on unemployment?

Another option is to use some of your unemployment money to prepay taxes. I put aside about $50 from each weekly payment into a separate savings account just for taxes.

Claimyr helped me understand the tax withholding options when I couldn't get through to Washington ESD on my own. Definitely worth trying if you need to speak with someone about your specific situation.

Just remember that even though Washington doesn't have state income tax, you still need to report your unemployment benefits on your federal return. Don't forget about that part!

If you're using tax software like TurboTax or H&R Block, they should automatically ask about unemployment benefits when you're entering your income information.

my friend used claimyr last month to get help with her unemployment taxes and said it was super helpful. she was able to get her withholding set up without waiting on hold for hours

Don't panic about the taxes! Most people who are on unemployment for part of the year don't end up owing as much as they think they will, especially if you had other income and tax withholding earlier in the year.

One more tip - if you end up owing taxes and can't pay the full amount right away, don't ignore it. Contact the IRS to set up a payment plan. They're usually pretty reasonable about working with people.

Thanks everyone for all the helpful information! I feel much better about the tax situation now. Going to set up withholding on my remaining benefits and start putting aside some money just in case.