Overview of Unemployment Benefits and Taxes
Unemployment benefits are taxable income. You must pay federal taxes on unemployment benefits. Some states also tax unemployment benefits. The amount of unemployment benefits over $10,200 is taxable. Married couples filing jointly can exclude up to $20,400 of unemployment benefits from taxes. Unemployment benefits come from taxes paid by employers. These taxes go into a trust fund used only to pay unemployment benefits.
Unemployment Tax in DC
To get unemployment benefits in DC, you must have earned enough income in the prior 12 months. DC has high income tax rates compared to other cities. DC tax rates depend on your income. DC requires quarterly estimated tax payments if your withheld taxes are less than 90% of what you owe. Employers who are newly liable for unemployment compensation taxes are assigned a standard tax rate equal to the average rate of contributions paid by all employers during the preceding year, or 2.7 percent, whichever is higher.
Taxable Wage Base for Unemployment in DC 2023
For 2023, the administrative fund tax will remain 0.2% for all employers. The unemployment-taxable wage base will be $9,000, unchanged from 2022.