Lived in one state while claiming unemployment in another

[littlepeanut]

I became unemployed due to the covid-19 shutdown. Before the shutdown, I lived and worked in Massachusetts. I had an active unemployment claim from the previous year from Ohio so I claimed unemployment from Ohio for several weeks until my claim expired. Do I need to file for nonresident Ohio state taxes? Or do I only file in Massachusetts?

[LenaH]

Per the Ohio Department of Taxation website, every nonresident having Ohio-sourced income must file a return. Unemployment compensation is taxable income in Ohio. 

The first thing you want to do is make sure you've filled out the Personal Info section correctly:

1. With your return open, select My Info in the left-hand menu.
2. Then, on the Personal info summary screen, scroll down to Other State Income, and select Edit.
3. At the Did you make money in any other states? question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
4. Select Continue to return to your Personal info summary.

After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.

To ensure accurate calculations, always complete the non-resident return first if filing in multiple states because your resident state might give you a credit for any taxes paid if any were withheld from your unemployment. 

[Hal_Al]

Despite the other reply saying otherwise, you do NOT need to file an Ohio return.  If the Ohio inemployment comp was received while you were a MA resident, it is only reported on the MA return. 

This rule is the same in most (if not all) states.

Answer no, when asked if you made/earned money in another state. 

[kyle2smith]

I lived in California but received New York unemployment benefits. I cannot find anything online about this. I am filing a Federal & California return; however, do I need to file a New York return? 

[DanielV01]

Unfortunately you do.  New York considers unemployment provided by the state system as being "New York Source" and thus taxable in New York.  And since California does not tax unemployment insurance at all, you might not be able to get a credit for taxes paid to New York because the income is not double-taxed, that is, it is not taxable in both California and New York.

[kyle2smith]

Thank you, Daniel. 

One more question: do you have a source for that info? 

[DanielV01]

Yes.  Please see New York Nonresident Tax Forms Instructions, page 24, under Line 14, Unemployment Compensation (quoted below, different font to show direct quote):  

New York State amount column

Enter that part of the federal amount that represents taxable
unemployment compensation received as a nonresident resulting
from employment in New York State. If the unemployment
compensation received from New York State sources is based
on wage or salary income earned partly in and partly out of
New York State, determine the amount allocable to New York
State in the same manner as the wage and salary income on
which it is based. (Italics added above)

[MBF30]

I lived in Illinois throughout 2021, but received unemployment benefits from California for the first 3 months of the year (where I previously lived). Is this considered earning income in another state?

[FangxiaL]

No, unemployment income is not considered "earned income". Earned income is income earned from employment (W-2 wages) or self-employment income.

@MBF30

[Hal_Al]

Q. I lived in Illinois throughout 2021, but received unemployment benefits from California for the first 3 months of the year (where I previously lived). Is this considered earning income in another state?

A.  No.  Since you received the money while living in IL, the CA  unemployment benefits is not considered making money in another state. Answer no when that question come up in the personal info section of TT

[Toon99]

hello,  if my child student In New york earned $1000 in wages, but our home residency is California, he received unemployment income from california, does new york tax on the unemployment income from other states?

[ErnieS0]

Yes and no. New York does not tax unemployment from California, but the benefits are included in figuring the overall tax rate @Toon99.

New York will base your child's tax rate on total income (unemployment is taxable in NY, but not California). The actual tax will be the NY income percent of that total tax.

For example, if your child earned $10,000 total and $3,000 in NY, their tax rate would be computed as if they earned $10,000 in NY.

Say the NY tax on $10,000 is $1,000. Then their tax would be 30% ($3,000/$10,000) of $1,000 or $300.

[bmelaragno]

Hello, 

If I lived in Ohio in 2021 and received unemployment from California- how do I handle this on my taxes in Ohio? 

Thanks! 

[MayaD]

Your unemployment compensation is only taxable to the state you were living in at the time you received it. 

Your unemployment income is taxable on your Ohio resident return.