If you are full time residents of one state but received unemployment from another state do you have to file state returns in both states?

[MarilynG1]

Doesn't matter; you are reporting income as a Non-Resident to New York (the question is 'what states you earned income in'.  'Other States' means states other than South Carolina (where you lived on 12/31/2021). 

Lots of folks have to file as non-residents to states they never lived in because they received income from those states.

So you lived in three states in 2021, but you earned income in four states (one you didn't live in). 

Click this link for more info on How to File a Non-Resident State Return. 

[subaonyx007]

@MarilynG1 

Thank you.

• Would this effect how I report my unemployment income (From NY State) on my federal taxes?
• Would I fill out everything on my 1099-G form as it is printed on the "income and expense" section?

[MarilynG1]

No, report your 1099-G in your Federal return as it was issued.

Click this link for more info on How to Enter a 1099-G for Unemployment.

[booshebach1]

I received under 10k in unemployment income from IL as a full time AZ resident. AZ informed me to deduct out of state unemployment income for 2021 (not taxable in AZ) but it transferred over from federal form. Would I subtract this from subtractions to AZ income on form 140 line S to exclude it or elsewhere? I am filing IL return for the income on 1099G and a tax credit for tax paid to another state on AZ return. Not sure how to subtract this unemployment income through turbo tax on AZ return since I can't override in Turbotax. 

[KrisD15]

To clarify,

The unemployment issued by Illinois would be taxable on an Illinois State Return, whether received as a resident or non-resident.

I see no Arizona "subtraction" for unemployment. 

I believe the advise might have been to deduct the Illinois Tax you pay on the unemployment. 

Can you supply the source for deducting the unemployment amount?  

According to the State of Illinois:

 "Unemployment compensation included in your federal adjusted gross income is taxable to Illinois if

• you earned it while you were an Illinois resident or
• you received it from the Illinois Department of Employment Security as a nonresident."

Illinois

According to the State of Arizona:

"State Taxes on Unemployment Benefits: Arizona taxes unemployment compensation to the same extent that it's taxed under federal law."

LINK

[Sailynnej]

I live in RI and got unemployment from MA - do I file both states or just one?  I am a bit confused from the other state answered questions

[PattiF]

You would need to file a return for both states. Nonresidents are subject to Massachusetts income tax on unemployment compensation that is related to previous employment in Massachusetts.

You should file the non-resident tax return for Massachusetts and then file a resident return for Rhode Island.

@Sailynnej

[aliely]

My daughter received unemployment from Iowa while living in Illinois. I am filling out non-resident for Iowa and resident for Illinois. She had taxes taken out for Iowa, but Illinois is showing she owes Illinois state taxes on that money, too. I thought you couldn't be doubly taxed in two states?

[MayaD]

IL and IA have a reciprocal agreement. Reciprocity agreements mean that two states allow its residents to only pay tax on where they live—instead of where they work.

Your daughter's unemployment benefits are taxable in the state she lived at the time she received the unemployment benefits.

 On IA non-resident return, enter 0 on the screen that asks for the amount of income earned in that state. This will eliminate any tax liability for that state, resulting in a full refund.

[aliely]

Thank you so much for your answer! That is what I thought, yet when I go through TurboTax, it adds in all of my daughter's income into her Iowa return from the Fed. Taxes and only gives her a small refund (under $100)--much smaller than the amount of tax she paid into the state for her unemployment (nearly $400). Then when I go through the questions for the IL state return, it comes out saying she owes nearly $300 in taxes to the state of Illinois. Shouldn't Turbo Tax be handling this so the entire nearly $400 is refunded from Iowa if what you are saying about the unemployment wages is correct? She ONLY lived in IL in 2021 and received unemployment from Iowa from January through April--her only income from either state until she got a job in IL in May.  I am STUMPED as to how to do this if the online tax software doesn't even figure it correctly!

[aliely]

Goodness! Out of complete and utter frustration, I deleted both of her state returns and started over with them. That did the trick! All is well--she will be getting her full refund from Iowa and able to use it to pay Illinois. Thanks, again for your help!

[TomD8]

@aliely, @MayaD  --

Unfortunately, the Illinois-Iowa reciprocal agreement does not extend to unemployment compensation.  See this:

https://tax.iowa.gov/iowa-illinois-reciprocal-agreement#:~:text=Examples%20of%20income%20that%20are,....

Also, Iowa's rule is that unemployment benefits that relate to employment in Iowa are taxable by Iowa.  See item 12-Nonresidents in this reference:

https://tax.iowa.gov/expanded-instructions/instructions-schedule-ia-126-nonresidents-and-part-year-r...

So your daughter has to file in both states (the unemployment is also taxable by her resident state), but she can claim a credit on her IL return for the taxes paid to IA, so she won't be double-taxed.  In TurboTax, be sure to complete the non-resident state return before the home state return, so that the program can properly apply the credit.

[aliely]

I had previously seen/read all of that information. I have filled out Iowa (nonresident state) prior to Illinois (resident state). Shouldn't TurboTax figure out both states taxes correctly from the information I put in during the Federal taxes "interview/questions" regarding her income from unemployment compensation?

[MarilynG]

Did you pay Iowa tax on your unemployment income as reported on your 1099-G?

If so, yes TurboTax would enter the income/tax paid to Iowa.  If the unemployment was the only income in Iowa and the tax withheld is correct, you should 'break even' with Iowa, since Iowa/Illinois are not reciprocal as @TomD8 mentioned above.

Illinois will tax all of your income (as a Resident) but give you credit for tax paid to Iowa on the unemployment income.  There will be a screen in the Illinois interview asking about 'tax paid to another state' which TurboTax may have already filled in for you if it was reported on a 1099-G.

If not, you will need to enter the amount of Iowa tax paid yourself.  

If you find you owe Illinois, remember that tax withheld on other Illinois income may not be correct.  

[Sailynnej]

I filed my non-resident unemployment in MASS and then my state where I live.  I owed MA $1100 and RI 750

Does that make sense??  After reading the Iowa and a few other comments I am wondering if I did it right or not.  Any thoughts?