topic I live in Iowa and had to file unemployment in Illinois. I did have state taxes taken out. How do I properly claim my state taxes? in State tax filing

I live in Iowa and had to file unemployment in Illinois. I did have state taxes taken out. How do I properly claim my state taxes?

mmcneill21 — Thu, 06 Jun 2019 14:19:33 GMT

IL and IA have a reciprocal agreement. Your unemployment...

HelenaC — Thu, 06 Jun 2019 14:19:34 GMT

IL and IA have a reciprocal agreement. Your unemployment benefits are taxable in the state you lived at the time you received the unemployment benefits.

If you lived in IL and IA during the year, allocate the unemployment benefits to the month's you lived in, in each state.
If you had IL income taxes withheld from your unemployment, while living in IA, you will need to file an IL nonresident income tax return, to get the IL income taxes you paid.

To file an IL nonresident income tax return, follow these instructions: https://ttlc.intuit.com/replies/3302052

For additional information about reciprocal states, click on What is a state reciprocal agreement?

Re: IL and IA have a reciprocal agreement. Your unemployment...

otter creek — Sun, 21 Feb 2021 20:25:09 GMT

Turbo Tax keeps asking to fix the error and I can't file my taxes. The 1099-G has it correct, worked in Illinois but live in Iowa so state taxes were IA. But it keeps taking me back instructing me to correct to IL state taxes. Anyone else having this issue?

Re: I live in Iowa and had to file unemployment in Illinois. I did have state taxes taken out. Ho...

MaryK4 — Sun, 21 Feb 2021 22:16:21 GMT

Illinois Department of Employment Security only allows Illinois state tax to be withheld from Unemployment payments. See Information Sheet for Income Tax Withholding Option

If you received Illinois Unemployment benefits but lived in Iowa, you must file an Illinois Nonresident tax return. The tax withheld with be used to pay the IL taxes or you can get it refunded. If you must pay IL tax on your unemployment in Illinois, you will get a credit on your Iowa tax return.

@otter creek

Re: IL and IA have a reciprocal agreement. Your unemployment...

benny899ty — Tue, 23 Feb 2021 12:24:39 GMT

Yes, I'm having the same issue. Live in Iowa, unemployment from Illinois. I get no errors if I change the state and zip code to Iowa, on the 1009g form, but that's not right either. But it goes thru without errors. State taxes were withheld on 1009G, but pretty sure they were Iowa State Taxes. Something is wrong with the Turbo Tax program

Re: IL and IA have a reciprocal agreement. Your unemployment...

MaryM428 — Wed, 24 Feb 2021 00:17:44 GMT

In this case you will have to file a Illinois state income tax return to collect any taxes that were taken by Illinois.
In the return it will ask how much money was earned in each state. The personal information section in TurboTax will ask if you made money in another state and you will answer Yes and select Illinois.

Iowa and Illinois have a reciprocal agreement for individual income tax purposes. At this time, Iowa's only income tax reciprocal agreement is with Illinois. Any wages or salary made by an Iowa resident working in Illinois is taxable only to Iowa and not to Illinois.

Re: IL and IA have a reciprocal agreement. Your unemployment...

Anonymous — Sun, 18 Apr 2021 14:55:26 GMT

I am! What did you end up doing? I'm so nervous of getting this wrong and having to pay back a ton of money next year. I don't get why TurboTax keeps asking us what we have in boxes 10, 10a, and 10b because I don't have that listed on my form. Do you? Thanks!

Re: IL and IA have a reciprocal agreement. Your unemployment...

TomD8 — Sun, 18 Apr 2021 15:32:54 GMT

If you're an Iowa resident receiving unemployment compensation, that income is taxable by both states. You must report it on a non-resident IL return, as well as on your home state IA return. You'll be able to claim a credit on your IA return for the taxes paid to IL on that income, so it won't be double-taxed.

Note: Both Illinois and Iowa have adopted the federal unemployment exclusion, which means that neither state will tax the first $10,200 of your 2020 unemployment compensation, as long as your federal MAGI is less than $150,000.

https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation#:~:text=If%20your%20modified%20adjusted%20gross,compensation%20of%20up%20to%20%2410%2C200.