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?

[pamelaspeters]

We are full time residents of Arizona, but the unemployment was from Minnesota

[DanielV01 · Accepted solution]

No, unless Minnesota tax was mistakenly withheld.  Although unemployment insurance income may come from another state, it is only taxable to the state you were living in at the time you received it.  If you had MN taxes taken out, you would want to file a MN nonresident return with zero income to have those taxes returned.  Otherwise, you wil only file Arizona.

[edpenney]

To be clear, I was an arizona resident but lived in minnesota (non-resident) last summer.  Recieved a Minnesota w-2 for 22,000.  I have an arizona drivers license.   Where do I make my claim.

[DavidS127]

More information may help resolve your question.  For example, was the W-2 you received for work while you lived in Minnesota, unemployment compensation you received from Arizona while living in Minnesota, or unemployment you received from Minnesota while living in Minnesota?

@edpenney

[sammybird2020]

I lived in Indiana for 2 months of 2020. Moved to Oklahoma for the last 10 months. I received all my unemployment in Oklahoma. So for tax proposes is my unemployment considered Indiana income or Oklahoma? It would seam to be Oklahoma but I'm not sure.

[ToddL99]

Your unemployment income is "Oklahoma income". 

As @DanielV01 states above, "although unemployment insurance income may come from another state, it is only taxable to the state you were living in at the time you received it".

(Some states (e.g. Massachusetts) take a different view  - if your unemployment was paid out from their unemployment insurance fund after you moved elsewhere, then they consider it as taxable by them and by your new state. Oklahoma is not one of those states).

[kyle2smith]

I lived in California; however, I received New York unemployment benefits. Do I have to pay NY income taxes? 

[DawnC]

Yes, if you lived in CA but received unemployment from NY state, you will need to file a nonresident NY return.   Any taxes you pay to NY will be credited to your resident CA tax return, so you won't be double-taxed.   The instructions are below, but remember to prepare the NY nonresident before your resident CA return so the tax credits get properly applied.  

How do I file a nonresident state return?      @kyle2smith

[dumbelldoor]

I actually have this situation... I moved from Massachusetts to Louisiana halfway through the year but received MA unemployment even after moving to LA.

MA taxes were withheld from the unemployment checks, even when I lived in LA 2nd half of the year.

Didn't seem like MA was crediting it, so I have all of that income as a subtraction on my LA return (so filing total of $0 income for LA).

Based on the responses here, it sounds like it shouldn't be a subtraction from LA but should be credited from MA?  But MA won't credit it because it's MA source income?  What do I do?

[DanielV01]

You will find on this website:  Learn about tax treatment of unemployment compensation ..., that Massachusetts does continue to tax the unemployment even after you have moved to another state.  Since Louisiana can tax this income also, you should receive a credit on your Louisiana return for the taxes you pay to Massachusetts on the income taxed by both states.  But that credit could be $0, especially if either of the two states have followed the Federal tax return's provision of exempting up to $10,200 of unemployment benefits.

[dumbelldoor]

Got it, thank you.  So, to clarify, it sounds like I have it configured correctly as-is.  Leave my MA return normal (without credit) and mark the unemployment income as a subtraction on LA because it was income taxed by another state.

But also still file LA return because it's my current residence, even though it is net $0 (MA unemployment is the only income I had in LA in 2020).

[AmyC]

LA filing requirement for part year residents is to file LA sourced income. If you have no LA sourced income, no need to file LA return. See Individuals - Louisiana Department of Revenue.

@dumbelldoor

[LeliaS]

I have an Oklahoma-related unemployment tax question as well: I lived in Oregon until April of 2020, when I moved to Oklahoma. I received unemployment from Oregon for several months after I moved to Oklahoma (and no unemployment while living in Oregon).  Oregon taxes and federal taxes were withheld from my unemployment benefits at the time the money was disbursed. 

I declared my unemployment income on my Oklahoma tax return under the question that was something like "Did you earn any income from other states while living in Oklahoma?" Now it seems I owe additional tax to Oklahoma for the unemployment income from Oregon. Does this seem correct to you?

I have spoken to two different tax specialists who have given me drastically different answers. One said I need to amend both of my state tax returns and pay additional taxes to Oregon; the other says I was correct in reporting the unemployment income on my Oklahoma return only.  It does seem strange to pay taxes to two different states for the same income. Oklahoma has much lower income taxes so if I could only pay Oklahoma taxes that would be ideal. Thanks for your insight and expertise.

[Hal_Al]

 (Edited per @TomD8 's reply):

 Unemployment compensation (UIC), is taxable by the state you lived in when you received the income.  So, the OR UIC is taxable  by OK. 

OR, unlike most states, apparently also  taxes UIC paid to non residents, so it  should have been reported on the OR return.   But, you claim a credit on your OK state return for the tax paid to OR on the UIC.

[TomD8]

@LeliaS 

Unemployment compensation earned in Oregon is taxable by Oregon, even if you are now a resident of another state.  See the following:

"Total compensation includes unemployment compensation benefits to the extent the benefits pertain to the individual's employment in Oregon.  If unemployment compensation benefits are received by a nonresident for employment in Oregon and in one or more other states, the unemployment compensation benefits must be apportioned to Oregon using any method that reasonably reflects the services performed in Oregon."

https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=20198

The Oregon unemployment you received as an OK resident is also taxable by OK, as @Hal_Al indicated.  You may claim a credit on your OK state return for the tax paid to OR on the income taxed by both states, so in effect you won't be double-taxed.