It's allocated to Federal and the state you lived in when you received the unemployment checks/payments. You said you were a resident in WI so it would be taxable in WI.
If you moved
during the process, then you need to file part year returns in both states,
allocating unemployment income based upon the timing of both.
Allocating unearned income is pretty straightforward – just allocate it to the state you were a resident of when you received it. Here are some examples:
- You received 3 quarterly dividend payments while living in Arkansas, and the remaining dividend while living in Oklahoma. Allocate the first 3 payments to Arkansas and the last payment to Oklahoma.
- You sold some stocks right after you moved to Iowa. Allocate the gain to Iowa.
- You closed an interest-bearing account while still living in California, so you'd allocate 100% of the interest to California.
- On the other hand, if the account remains open, you'd allocate the interest you earned as California resident to California, and the remainder to your new state. An easy allocation method is to divide the year's interest by 12, and then multiply the figure by the number of months you lived in each state.
Related information: Do I have to pay taxes on unemployment?
