Since your unemployment income is issued by Illinois, you will need to file a nonresident IL state income tax return.
Illinois unemployment
On your Arizona resident tax return, you will be able to claim a credit for any taxes paid in Illinois to ensure the same income is not taxed twice.
To ensure your return is calculated correctly, you will need to confirm a few items:
In the My Info section of TurboTax, confirm that you have entered the correct state information:
- Click Edit to the right of your name
- Confirm your input under #2 Tell us the state(s) you lived in
- Go back to the personal information section, and verify the mailing address and "Other state income" section. Be sure to answer yes to the question asking "Did you make money in any other states?".
Please note the following as it will affect the calculations:
When you are preparing more than one state return, make sure you prepare the nonresident Illinois state tax returns first. Be sure to answer the questions correctly to ensure only income sourced to that state specifically are reported.
Once you have entered all of the nonresident state information, then start your Arizona state tax return. This will ensure you receive any credits for taxes on income which may have been taxed in Illinois.
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