1099-G From Massachusetts

[Taxquestions1000]

Hi!

For 2021 and years prior — live in CT and have worked 100% remote in CT regardless of pandemic. Employer is based in MA, but I do not nor have ever physically worked in MA. No state taxes withheld for MA.

Received 1099-G for unemployment from MA in 2021 with no MA state taxes withheld. Was told I needed to submit for unemployment from MA rather than CT.

Can I just pay state taxes to CT as that is my state of residency, or do I need to complete non-resident form for MA to account for MA unemployment received in 2021? If so, do I only note unemployment income as source income to/from MA?

thanks!

[LenaH]

Per the State of Massachusetts, non-residents are subject to Massachusetts income tax on unemployment compensation that is related to previous employment in Massachusetts. Although you did not physically work in Massachusetts, your employer was based in Massachusetts. Therefore, you will need to file a nonresident return for Massachusetts to claim the unemployment income. Since that is your only Massachusetts sourced income, you would only allocate your unemployment compensation on your nonresident return. 

For more information, please see Learn about the tax treatment of unemployment compensation.

[TomD8]

Your unemployment compensation is definitely taxable in CT.  CT residents are subject to tax on all their income, regardless of its source.

MA's rule is this:

"Nonresidents are subject to Massachusetts income tax on unemployment compensation that is related to previous employment in Massachusetts."

https://www.mass.gov/service-details/learn-about-tax-treatment-of-unemployment-compensation#:~:text=...

Since you never worked in Massachusetts (which is why your work income is not taxable by MA), in my opinion your unemployment is also not taxable by MA.  My opinion is of course entirely unofficial.