What happens if I don't file my Washington ESD unemployment on my taxes?

Don't even think about it! The IRS absolutely knows about your unemployment benefits. Washington ESD reports all 1099-G forms directly to the IRS. They'll catch it and you'll end up owing penalties and interest on top of the taxes you already owed.

My neighbor tried this a few years ago and got audited. Ended up paying way more in the end with all the penalties.

Wait I'm confused about this too. I thought unemployment wasn't taxable? I've been getting UI from Washington ESD since November and nobody told me it was taxable income.

I had a similar situation last year where I was stressed about owing taxes on my unemployment. What really helped was using Claimyr to get through to someone at Washington ESD who could explain exactly what my 1099-G should look like and answer questions about the tax implications. Way easier than trying to call them myself - you can check it out at claimyr.com if you need to talk to someone. There's even a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

The IRS WILL catch this. They have all the 1099-G data and their computers automatically flag returns that don't match. You'll get a letter demanding payment plus penalties that can be 20% or more of what you owed.

Look I get being tight on money but not reporting unemployment is a really bad idea. The penalties make it so much worst. Can you set up a payment plan with the IRS if you can't pay all at once?

dude just report it, its not worth the stress of wondering if theyll catch you (they will

Another thing to consider - if you don't report it correctly and they catch it later, it can also affect future unemployment claims. Washington ESD could potentially flag your account for issues.

I made this mistake years ago thinking nobody would notice $3000 in unemployment. Got a letter from IRS about 18 months later demanding payment plus like $600 in penalties and interest. Definitely not worth it.

Can I ask a related question? I got unemployment from Washington ESD in 2024 but also worked part time. Do I report both the unemployment AND the wages?

The bottom line is unemployment benefits are income just like wages. The government wants their cut and they have all the paperwork to prove you received it.

If money is really tight you might qualify for free tax preparation through VITA programs. They help with situations like this all the time.

I used Claimyr again this year to double-check some details on my 1099-G before filing. Super helpful to actually talk to someone at Washington ESD instead of guessing about what the form means.

Don't risk it OP. Report the unemployment income. The IRS catches pretty much everything eventually and the penalties make it way more expensive.

Smart choice. Better to deal with the tax bill now than deal with IRS collections later. Those people are not fun to deal with.

Good luck with your taxes OP. At least now you know for next year to have them withhold taxes from your unemployment if you need benefits again.

One more vote for just reporting it correctly. I know it sucks to owe money but it's way better than the alternative.

If anyone else reading this is confused about their Washington ESD 1099-G form, I'd definitely recommend checking out that Claimyr service someone mentioned earlier. Really helped me understand what everything meant before I filed.

Update us after you file OP! Hope it goes smoothly for you.