What taxes are taken out of unemployment benefits from Washington ESD?

Thanks! How do I request the tax withholding? Is it something I can do online through my ESD account?

Yes, you can change your tax withholding preference online through your SecureAccess Washington account. Look for the 'Tax Information' section in your unemployment account settings.

Yikes, that's exactly what I'm trying to avoid. Did you get a 1099-G form from Washington ESD?

yeah they send you a 1099-G in January showing how much you received in benefits. mine showed like $8,200 in benefits for the year

How does that work exactly? I've been trying to call Washington ESD for weeks about different issues.

Basically they help you get through the phone system and connect you with an actual Washington ESD representative. Way better than spending hours redialing busy numbers.

Good point. I made about $45,000 before I got laid off, so I'm not sure what tax bracket that puts me in.

With that income level, you're probably looking at 12% federal tax rate, so the 10% withholding should be close but might not cover everything.

Unfortunately unemployment benefits are fully taxable as ordinary income. You'll definitely want to start planning for that tax bill.

well crap. guess I need to figure out how much I'll owe. this is stressful

Great! That should help you avoid a big tax bill later. The change should take effect with your next payment.

smart move. wish I had done that from the beginning

That's true, but most people find it easier to just have it withheld automatically. Less chance of forgetting or spending the money.

Fair point. I'm pretty disciplined about saving but I can see how automatic withholding would be safer for most people.

That's a good point. I'm hoping to find work within the next few months so I probably won't be on unemployment for a full year.

Exactly. Better to get a refund than owe money. You can always change the withholding percentage later if needed.

Yes, the tax withholding applies to all unemployment benefit payments including the waiting week payment. Check your payment history to see if taxes were deducted.

Thanks, I'll check that. The waiting week payment seemed like the full amount but I might have missed it.

Seriously try that Claimyr service I mentioned earlier. I was in the same boat - couldn't get through to anyone at Washington ESD for weeks. They got me connected to a representative within a few hours and I got all my questions answered.

I'll look into that. At this point I'm willing to try anything to get some answers.

Good advice. I've been keeping screenshots of my payment history just in case.

smart. I had to reconcile some discrepancies with my 1099-G last year and having my own records saved me a lot of hassle

That matches my experience too. The 10% withholding gets you pretty close for most people.

Yeah, I'd rather be a little short than way over. At least it's manageable.

For Washington ESD, it's just the 10% federal withholding option. You can't choose a different percentage. If you want more or less taken out, you'd need to make estimated tax payments or adjust withholding at a job.

Got it, thanks for clarifying. I was hoping I could set it higher but 10% is better than nothing.

Same here! I had no idea unemployment was taxable until I started getting benefits. Glad I asked.

Right? They really should make this clearer when you first apply for benefits.

That's a good strategy. I did that last year and it worked out well.

Yeah, it's an easy way to catch up if the 10% unemployment withholding wasn't quite enough.

You're right - there's a lot of confusion about this. Washington state has no state income tax, so unemployment benefits aren't taxable for state purposes. But they're still taxable for federal income tax.

That makes sense. I was getting confused by the different information I was finding.

That's probably what I would have done if I hadn't found out about the automatic withholding. Good backup plan.

Yeah, it takes discipline but it works. I actually earned a little interest on the money that way.

All the pandemic unemployment programs (PUA, PEUC, FPUC) were also taxable income. Same rules applied - you could have 10% withheld or pay at tax time.

Thanks for the info. I wasn't on those programs but good to know for future reference.

I actually tried them after your recommendation and they got me through to Washington ESD the same day. Finally got my tax withholding sorted out.

Awesome! Yeah, it's such a relief to actually talk to someone instead of getting stuck in phone loops.

You're welcome! I'm glad my question helped other people too. That's why I love these forums.

For sure. Way better than trying to figure this stuff out on your own.