Washington ESD unemployment taxes - how much do I owe on benefits?
I've been collecting unemployment through Washington ESD for about 6 months now and just realized I need to figure out the tax situation. I know unemployment benefits are taxable but I'm not sure how much I should expect to pay. I've been getting $620 per week and didn't have any taxes withheld because I thought I could handle it myself. Now I'm worried I'm going to owe a huge amount when I file my taxes. Has anyone calculated roughly how much you end up owing on unemployment benefits? Should I start having taxes withheld from my remaining weekly claims?
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Brian Downey
Unemployment benefits are taxed as regular income at your normal tax rate. So if you're in the 22% tax bracket, you'll owe roughly 22% of what you received. Plus you might owe state taxes depending on where you live. You should definitely start having taxes withheld if you're still collecting.
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Myles Regis
•Thanks! Do you know if Washington state has income tax on unemployment? I thought we didn't have state income tax here.
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Brian Downey
•You're right, Washington doesn't have state income tax so you only need to worry about federal taxes on your unemployment benefits.
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Jacinda Yu
I had the same shock last year. Made the mistake of not withholding anything and ended up owing about $3,200 on $18,000 in unemployment benefits. The IRS considers it regular income so it gets added to whatever else you made that year.
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Myles Regis
•Ouch, that's a big hit! Did you set up a payment plan or have to pay it all at once?
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Jacinda Yu
•Had to set up a payment plan. Definitely wish I had just had the 10% withheld from the start.
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Landon Flounder
Quick question - how do you even set up tax withholding on Washington ESD benefits? I've been trying to figure this out on the website but can't find where to change it.
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Callum Savage
•When you file your weekly claim, there should be an option to have federal taxes withheld. You can choose 10% which is the standard rate for unemployment benefits. If you can't find it online, try calling Washington ESD but good luck getting through.
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Landon Flounder
•Yeah the calling thing is impossible. I've tried dozens of times and either get busy signals or get disconnected after waiting forever.
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Ally Tailer
•I actually found a service called Claimyr that helped me get through to Washington ESD when I needed to change my withholding settings. You can check them out at claimyr.com - they have a video demo showing how it works at https://youtu.be/7DieNd3C7zQ. Saved me tons of time trying to call myself.
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Aliyah Debovski
The tax calculation depends on your total income for the year. If unemployment is your only income, you might not owe as much as you think. But if you worked part of the year and then got unemployment, it could push you into a higher bracket.
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Myles Regis
•I worked January through May making about $35,000, then been on unemployment since June. So I guess that puts me in a higher bracket than if it was just the unemployment alone.
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Aliyah Debovski
•Yeah with that income level plus unemployment you're probably looking at the 22% federal bracket. Definitely start withholding now if you haven't already.
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Miranda Singer
Don't forget about quarterly estimated taxes if you're not having anything withheld! The IRS expects you to pay as you go, not wait until April. You might owe penalties if you don't pay enough throughout the year.
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Myles Regis
•Wait, what? I've never heard of quarterly payments for unemployment. How does that work?
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Miranda Singer
•If you're not having taxes withheld and you expect to owe more than $1,000 when you file, you're supposed to make quarterly estimated payments. Look up Form 1040ES on the IRS website.
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Cass Green
•This is getting complicated. I'm in the same boat and had no idea about quarterly payments. Maybe I should just have them start withholding the 10% and call it good.
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Callum Savage
The easiest way is to have Washington ESD withhold 10% for federal taxes from each payment. That usually covers most people unless you're in a really high tax bracket. You can change this setting when you file your weekly claims online.
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Finley Garrett
•Is 10% usually enough? I'm getting $540 a week and wondering if I should withhold more than that.
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Callum Savage
•10% covers most people in the lower to middle tax brackets. If you made a lot of money earlier in the year or have other income, you might want to withhold more or make quarterly payments.
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Madison Tipne
I learned this the hard way too. Got about $15,000 in unemployment last year and ended up owing $2,800 at tax time. Had to scramble to come up with the money. Now I always have the maximum withheld.
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Myles Regis
•That's really helpful to know a real example. So roughly 18-19% of your total benefits went to taxes?
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Madison Tipne
•Yeah about that. I had some other income too which pushed me into a higher bracket, but even without that it would have been at least 12-15%.
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Holly Lascelles
The Washington ESD website has a section about taxes but it's not very clear. Basically unemployment benefits are treated like wages for tax purposes. You'll get a 1099-G form in January showing how much you received.
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Malia Ponder
•When do they usually send out the 1099-G forms? I want to make sure I watch for it.
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Holly Lascelles
•They're required to send them by January 31st. You should also be able to access it online through your Washington ESD account.
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Kyle Wallace
Another thing to consider - if you had taxes withheld from your job earlier in the year, that might cover some of what you'll owe on unemployment. Look at your last paystub to see your year-to-date withholding.
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Myles Regis
•Good point! I had about $4,200 withheld from my job through May. Does that help offset what I'll owe on unemployment?
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Kyle Wallace
•Yes, all your withholding for the year gets applied to your total tax bill. So if you had $4,200 withheld from work, that reduces what you'd owe on the unemployment benefits.
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Ryder Ross
I'm dealing with this same issue and finally got through to someone at Washington ESD about changing my withholding. Took forever to reach them though - kept getting disconnected or couldn't get past the busy signal.
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Gianni Serpent
•How did you finally get through? I've been trying for weeks to talk to someone about this.
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Ryder Ross
•Honestly I used Claimyr to help me get connected. It's at claimyr.com and they have a demo video at https://youtu.be/7DieNd3C7zQ showing how it works. Worth it to avoid the phone hassle.
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Henry Delgado
Here's a rough calculation: if you're single and your total income (job + unemployment) is around $50,000-60,000, you're probably looking at about 12-22% federal tax rate. So on $16,000 in unemployment benefits, you'd owe roughly $2,000-3,500 in federal taxes.
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Myles Regis
•That's really helpful! My total will be around $55,000 for the year so sounds like I should expect to owe around $2,500-3,000 on the unemployment portion.
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Olivia Kay
•Don't forget to factor in your standard deduction though. That reduces your taxable income before the rate gets applied.
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Joshua Hellan
If you're really worried about owing a lot, you could always make estimated tax payments directly to the IRS instead of having Washington ESD withhold. That way you have more control over the amount.
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Jibriel Kohn
•How do you make estimated payments? Is there a minimum amount?
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Joshua Hellan
•You can pay online at irs.gov or mail in Form 1040ES with a check. No minimum amount, you just pay whatever you think you'll owe.
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Edison Estevez
Just to add - if you end up owing more than $1,000 when you file and didn't pay enough during the year, you might get hit with an underpayment penalty. It's usually not huge but something to be aware of.
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Myles Regis
•How much is the penalty usually? I'm starting to think I should definitely set up withholding or make a payment soon.
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Edison Estevez
•It varies but usually a few hundred dollars depending on how much you owe and when you pay it. Better to just start withholding now and avoid the penalty altogether.
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Emily Nguyen-Smith
I had a similar situation and ended up talking to a tax preparer about it. They said the safest approach is to withhold 10% federal and then make a small estimated payment each quarter if you think you'll still owe more. Covers your bases without overwithholding.
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James Johnson
•That sounds like a good strategy. Better to be safe than sorry when it comes to taxes.
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Myles Regis
•Yeah I think I'm going to start having them withhold 10% immediately and then maybe make a quarterly payment to be extra safe. Thanks everyone for all the advice!
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