Washington ESD - who is subject to federal unemployment tax requirements?

In Washington, you're subject to unemployment tax if you pay wages of $1,000 or more in any calendar quarter, or if you have one or more employees for some portion of a day in each of 20 different weeks during a calendar year. Since you have 3 employees working regularly, you definitely need to register with Washington ESD.

You'll need to register for both state unemployment insurance through Washington ESD and federal FUTA. The federal rate is 6% but you get a credit of up to 5.4% if you pay your state taxes on time, so effective rate is usually 0.6%.

I went through this same situation last year and had trouble getting through to Washington ESD to register. Their phone lines are always busy. I ended up using Claimyr (claimyr.com) to get connected to an actual agent who walked me through the registration process. They have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

Don't forget about agricultural and domestic workers - they have different rules. Regular employees like yours are covered under standard unemployment insurance requirements.

ugh the washington esd website is so confusing trying to figure this stuff out. why cant they just have a simple checklist???

Also remember that once you're registered, you'll need to file quarterly reports even if you don't owe any taxes. Washington ESD requires the forms to be submitted on time or you get penalties.

Just to add - nonprofit organizations have different options. They can either pay the standard unemployment tax rate or choose to reimburse Washington ESD for benefits paid to their former employees.

The federal FUTA exemptions are pretty limited - mostly just family members and certain student workers. Your regular part-time employees definitely count.

I had similar questions when I started my business. Claimyr really helped me get answers from Washington ESD without the usual runaround. Worth checking out if you need to talk to someone there.

Don't forget that Washington state also has Paid Family and Medical Leave that you'll need to register for. It's separate from unemployment but administered through ESD.

The key thing is to register as soon as you meet the requirements. Don't wait because penalties accrue from when you should have registered, not when you actually do.

For what it's worth, once you're set up the quarterly reporting isn't too bad. The online system works pretty well for filing.

One more thing - keep good records of your wage payments from day one. Washington ESD can audit and they want detailed payroll records.

Thanks everyone for the helpful info. Sounds like I definitely need to register with Washington ESD. I'll try calling them first and if I can't get through maybe I'll check out that Claimyr thing.

Just remember that unemployment tax is separate from workers comp and other business insurances. Make sure you're covering all your bases.