Washington ESD unemployment taxes - how much taxes do i pay on unemployment benefits?

Oh no I don't think I chose that option. Can I change it now to start having taxes withheld?

Yes you can change your withholding election by logging into your ESD account and updating your payment preferences. Better to do it now than get hit with a big tax bill next year.

Yikes that's a lot! So even with the 10% taken out you still owed more?

Yeah because my unemployment pushed me into a higher tax bracket when combined with my part-time work income. I'd recommend setting aside at least 15-20% to be safe.

Is that legit? I've been trying to call ESD for weeks about my claim issues.

Yeah it's real. They basically call on your behalf and connect you when they get through. Saved me so much frustration.

I worked January through March before I got laid off, made about $12,000. So my unemployment will be on top of that.

With that income level you'll definitely want to have taxes withheld or set money aside. You're looking at probably 12-15% effective rate on the unemployment portion.

They do offer to withhold taxes, but it's optional. I think they assume some people might have low enough total income that they won't owe much.

well they should make it more obvious! I probably missed that option too when I was rushing through the application

That's actually really smart. I should start doing that with my remaining payments.

Same here, I put 20% in a separate savings account as soon as the payment hits. Learned from my mistakes in 2020.

Good point! I should double check my address is correct in my ESD account.

The 1099-G is also available online through your ESD account if you lose the paper copy or move.

True! My friend in California has to pay both federal and state taxes on unemployment. We're lucky here.

Oh that's actually really good to know. So it's just federal taxes I need to worry about.

That's exactly why I mentioned Claimyr earlier - they handle the calling for you so you don't waste time on hold. Definitely worth checking out.

I might have to try that. This is ridiculous that it's so hard to reach them for something simple like changing tax withholding.

Good to know there are options, but yeah I'd rather not get into that situation if I can avoid it.

Payment plans with IRS come with interest and fees though, so definitely try to save up the tax money if possible.

Wow this is getting complicated. I had no idea there were quarterly payments to think about too.

Only if your total tax liability is high enough. Most people on unemployment for just part of the year don't need to worry about quarterly payments.

Really? I'll check that right now. That would be so much easier than calling.

Yeah the option is there, just not super obvious. Look for 'Update Tax Withholding' or something similar in your payment section.

That makes sense. I think I'll do the 10% withholding plus save an extra 5% on my own.

That's a solid plan. Better to have too much saved than not enough when tax time comes around.

Got it, so everything I collect this year goes on my 2025 tax return that I'll file in 2026.

Exactly. The 1099-G you get will show the total for the calendar year, not based on when your claim started.

I'm starting to think this might be worth trying. The regular ESD phone number is basically useless.

I found the tax withholding option online, but it's good to know there's a backup plan for other ESD issues.

Good point. I should start a tax folder for all my unemployment stuff.

Yeah definitely keep your payment history from ESD and any withholding records. Makes tax prep much easier.