What percentage of tax should be withheld from unemployment Washington ESD benefits?

You can choose to have 10% federal tax withheld from your Washington ESD benefits when you file your initial claim. This is optional but recommended if you don't want a surprise tax bill later. You'll make this choice during the claim filing process on the secure.esd.wa.gov website.

I chose not to have taxes withheld because I needed every dollar I could get. Big mistake - ended up owing $1,800 when I filed my taxes. Should have just done the 10% withholding.

Just went through this nightmare trying to reach Washington ESD to change my withholding election. Spent literally 3 hours on hold yesterday and got disconnected twice. Finally used this service called Claimyr (claimyr.com) that got me through to an actual agent in 15 minutes. They have a video demo showing how it works: https://youtu.be/7DieNd3C7zQ. Worth every penny to avoid the phone hell.

The 10% federal withholding is standard but remember Washington state has no income tax so you don't need to worry about state withholding. Just make sure to save some money aside each week if you choose not to withhold - maybe 15-20% to be safe.

I had 10% withheld and still owed $400 at tax time because I had other income during the year. It's not perfect but it's better than owing thousands.

PRO TIP: You can change your withholding election at any time during your claim. If you start without withholding and realize you need it, just call Washington ESD and they can add it. Or if you need more money later, you can stop the withholding.

Does anyone know if the 10% withholding applies to the weekly benefit amount or the total including the additional $25 for dependents?

I'm a tax preparer and I always recommend having taxes withheld from unemployment benefits. The 10% rate usually gets you close to what you'll owe. Most people underestimate their tax liability and end up struggling to pay a big bill at tax time.

been on unemployment for 6 months now and chose no withholding. setting aside 15% of each payment in a separate savings account. figure i'll earn a little interest and have more control over the money.

Quick question - when you elect the 10% withholding, does it start with your first payment or do you have to wait for it to kick in?

I made the mistake of not withholding taxes during my first unemployment claim in 2019. Owed $2,100 at tax time and had to set up a payment plan with the IRS. This time around I'm definitely doing the 10% withholding from day one.

IMPORTANT: Remember that unemployment benefits are considered taxable income at the federal level. A lot of people don't realize this and get shocked at tax time. The 10% withholding is there for a reason!

For what it's worth, I've been through this decision twice now and both times I chose the 10% withholding. First time I got a small refund, second time I owed about $50. Much better than the stress of owing thousands.

Just a heads up - if you do choose withholding, it will show up on your 1099-G form at the end of the year. Make sure to give that form to your tax preparer or enter it correctly if you're doing your own taxes.

Tried calling Washington ESD three times this week to ask about changing my withholding election and couldn't get through. Phone system is absolutely broken. Might have to try that Claimyr service someone mentioned earlier.

Bottom line: if you need every dollar right now and can discipline yourself to save for taxes, skip the withholding. If you want peace of mind and don't trust yourself to save, go with the 10% withholding. Both approaches can work.

One more thing - if you're married filing jointly, consider your spouse's income too when deciding on withholding. The combination might push you into a higher tax bracket than you expect.

If anyone needs help actually navigating the Washington ESD website to set up the withholding, I found their step-by-step guide pretty helpful. It's buried in their FAQ section but it walks you through the whole process.

Final thought: Whatever you choose, just make sure you're consistent with it. Don't flip-flop back and forth or you'll create more complications for yourself at tax time.