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Returning Member

Unemployment tax withholding

Unemployment tax withholding in California is done when you certify unemployment biweekly with the state, they ask if you want to withhold 10% for tax. I did this every time I certified, yet I was penalized in my taxes for not having paid enough taxes quarterly. How can I avoid this for next year?

2 Replies
Employee Tax Expert

Unemployment tax withholding

Hi @silvirgirl  


There are a few  things you can do to mitigate the amount of tax you pay at the end of the year if you owe taxes on unemployment.  The easiest way to handle the tax is to send in quarterly estimated tax payments to the IRS.  In this case, you would estimate the additional amount you think you will owe above what is already being withheld for federal taxes and pay the amount in 4 quarterly installments.  The installments for quarterly tax estimates are due on April 15th, July 15th, September 15th, and January 15th.


The second step you can take is to file Form W-4V, which is the Voluntary Withholding Request.  This form allows you to increase the amount of withholding from government payments.  Finally, if you are working for part of the year in another capacity.  You may be able to increase the withholding from your employee wages to compensate for the amount that was not withheld from unemployment.


Out of all three of the options, I like the estimated tax payments the best since it gives you the most flexibility.  I've included links below regarding how to determine the amount you should submit and how to submit estimated tax payments.


Good luck and have a great day!

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Returning Member

Unemployment tax withholding

thank you so much, @James-B, For taking the time to explain this.

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