Pay for your accrued vacation hours is not Wisconsin income because you were not a Wisconsin resident, nor is it taxable by WI to a non-resident.
Wisconsin establishes three conditions for changing your “domicile” (your home). Your domicile, once established, is never changed unless all three of the following occur or exist:
• You specifically intend to abandon your old domicile and take actions that show that intent
• You intend to acquire a new domicile and take actions that show that intent
• You are physically present in the new domicile
You never planned to stay in WI nor took any steps to establish residency there (I assume). Therefore, you were a nonresident.
Wisconsin taxes non-residents on wages, salaries, commissions, and other income for services performed in Wisconsin. Your accrued vacation was not from performing services in WI. Therefore, it is not WI income.
It has to be income from some state. During those three months, you appear to have been in transition, having abandoned your Colorado residency. However, since it was based on money you made while a CO resident, I would include it as CO income.
Refer to Tax Information for Part-Year Residents and Nonresidents of Wisconsin for 2020
If WI tax were withheld, you may want to file a WI return to get the money back. File with $0 WI income. Attach a copy of your CO return showing you reported all your income there and include an explanation.
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