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What counts as unemployment income for Washington ESD weekly claims?

I'm really confused about what Washington ESD considers unemployment income when I file my weekly claims. I know I have to report any work I do, but what about the actual unemployment benefits themselves? Do I need to report my UI payments as income anywhere else like on taxes? Also getting some conflicting info about whether things like severance pay or vacation payout count as income that affects my weekly benefit amount. Can someone explain what unemployment income actually means and how it works with Washington ESD?

Unemployment benefits ARE income - they're taxable income that you'll need to report on your tax return. Washington ESD will send you a 1099-G form at the end of the year showing how much you received. When you file your weekly claims though, you don't report your UI benefits as 'income' - those are separate from work income.

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Oh ok that makes sense. So the UI payments themselves are income for tax purposes but not something I report when doing weekly claims?

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Exactly right. Your weekly claim asks about work income/earnings, not about the unemployment benefits you're receiving.

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The tricky part is understanding what other types of income affect your benefits. Severance pay usually does count and can delay when you can start collecting. Vacation pay depends on when it was earned vs when it was paid out.

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I did get some vacation payout when I was laid off in December. Should I have reported that on my initial claim?

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Yes, you should report vacation payout. Washington ESD needs to know about any money you received related to your employment separation.

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If you're having trouble getting through to Washington ESD to clarify income reporting questions, I had good luck with Claimyr recently. It's a service that helps you actually reach an agent instead of getting the busy signal all day. Check out claimyr.com - they have a demo video at https://youtu.be/7DieNd3C7zQ showing how it works. Saved me hours of calling.

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Never heard of that service but honestly anything is better than calling Washington ESD 50 times and getting hung up on

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Might have to try that if I can't figure out this vacation pay situation

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unemployment income is just the money you get from unemployment right?? like the weekly payments? im so confused by all this stuff

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Yes, your weekly UI payments are unemployment income. But when people ask about 'unemployment income' they might mean different things - the benefits you receive, or income that affects your benefits.

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ok thanks that helps clear it up a little

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Here's what you need to know about income and Washington ESD: 1. UI benefits = taxable income for IRS purposes 2. Work earnings = must report on weekly claims 3. Severance/vacation pay = affects initial eligibility 4. Pension income = may reduce weekly benefit amount 5. Self-employment income = must report even small amounts The key is understanding which type of income affects what part of the process.

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This is super helpful! I didn't realize pension income could reduce benefits. Good thing I don't have that to worry about yet.

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Wait, even small amounts of self-employment income? I sold some stuff online last month, do I need to report that?

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Yes, any self-employment earnings need to be reported on your weekly claim, even if it's just $20 from selling things online.

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The Washington ESD website explains this but it's buried in like 47 different FAQ pages. Basically unemployment income refers to your weekly benefit payments - that's income you're receiving. But when you file weekly claims, you report OTHER income sources that might affect those benefits.

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Yeah the website is not user friendly at all. I've been clicking around for hours trying to find clear answers.

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The website redesign made everything worse somehow

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I've been on unemployment for 8 weeks and STILL don't fully understand all the income rules. They make it so complicated for no reason. Like why can't they just ask 'did you work this week' instead of all these detailed questions about different types of income.

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The detailed questions are there because different types of income affect your benefits differently. Work income might reduce your weekly amount, while things like severance can disqualify you entirely for certain weeks.

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I get that but they could explain it better instead of using confusing government language

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Pro tip: keep track of ALL income sources in a simple spreadsheet. Makes it way easier when you're doing your weekly claims and when tax time comes around. Include dates, amounts, and source of income.

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That's smart, I should start doing that now before I forget what I've received

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Great idea! I wish I had done this from the beginning

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just to add to what others said - your unemployment payments will show up on your tax return as income, so if you're not having taxes withheld from your weekly benefits, you might owe money at tax time. You can request withholding on your Washington ESD account.

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Oh wow I hadn't thought about that. Should I be having taxes taken out now?

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It's usually a good idea unless you want to save up to pay a big tax bill later. You can change the withholding setting anytime in your account.

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The term 'unemployment income' is confusing because it could mean money FROM unemployment (your benefits) or money AFFECTING unemployment (other income sources). Context matters when people use that phrase.

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You're right, that's exactly why I was confused. People use it to mean different things.

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Yeah the terminology around unemployment is pretty unclear in general

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If anyone is struggling to get answers from Washington ESD about income questions, I used Claimyr last week and actually got through to someone who could explain my specific situation. Way better than the automated system that just hangs up on you.

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How much does that service cost? Might be worth it to get real answers

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It was worth it for me to avoid spending entire days trying to call. Check their website for current info.

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been dealing with this for months and Washington ESD still hasn't given me a straight answer about whether my freelance work counts as self employment income. the system is totally broken

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Freelance work typically does count as self-employment income that you need to report. If you're getting paid as an independent contractor (1099), that's definitely reportable.

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yeah that's what I thought but when I called Washington ESD they gave me conflicting information

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The bottom line is: unemployment benefits are income you receive and must pay taxes on. Any OTHER income you earn while collecting unemployment might affect your weekly benefit amount and must be reported when you file your weekly claims.

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This thread has been super helpful. I think I understand the difference now between the income I receive vs income I need to report.

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Glad this helped clear things up for people!

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One more thing - if you made a mistake reporting income on past weekly claims, you should contact Washington ESD to correct it. Better to fix it now than deal with an overpayment notice later.

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Good point about fixing mistakes early. I'm pretty sure I reported everything correctly but will double check.

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Yeah overpayment issues are a nightmare to deal with. Much easier to prevent them by reporting accurately from the start.

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Thanks everyone for explaining this. The Washington ESD system makes something that should be simple way more complicated than it needs to be.

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Totally agree, they could make the whole process much clearer

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At least forums like this help people figure it out together!

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I'm new to unemployment and this thread has been really eye-opening! I had no idea that UI benefits themselves count as taxable income. I've been collecting for about 3 weeks now and haven't set up tax withholding yet. Should I be worried about owing a lot at tax time? Also, does anyone know if there's a penalty for not having taxes withheld from unemployment benefits, or is it just like any other situation where you might owe taxes in April?

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You're not in trouble for not having taxes withheld yet! There's no specific penalty for unemployment tax withholding - it's treated like any other income where you might owe at tax time. The main risk is just having a larger tax bill in April instead of getting money back. If you're worried about owing too much, you can set up withholding now in your Washington ESD account, or you could make estimated quarterly tax payments. Three weeks isn't too long to go without withholding, so don't stress too much about it.

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