Michigan and South Carolina Unemployment Tax Relief Questions

[syoung123]

Hello, do you have information on whether Michigan and South Carolina have the same unemployment compensation exclusion as Federal?  Also, is it correct that both Michigan and South Carolina extend the filing deadline to 5/17/2021, and it is done automatically so I don't need to file any extension form?  Thank you. 

[MayaD]

Yes, both Michigan and SC extended the filing deadline to 05/17/2021 and it is done automatically. 

The $10,200 federal exemption for unemployment compensation received in 2020 also applies for Michigan income tax purposes. However South Carolina isn't offering a tax break on unemployment benefits received last year.

[syoung123]

Thank you for the information.  I have one more question.  I am a Michigan resident and I am filing the South Carolina return as non-resident, because I have a rental property there, that had a net loss on rental revenue.  Since the unemployment income was from Michigan, I assume that it would not be taxable for South Carolina.  How would I fill out the non-resident return to account for the federal $10,200 exclusion?  On the SC schedule NR, there is a line 13 unemployment compensation and line 15 other income.  Since the unemployment income was from Michigan, it would not be taxable for South Carolina then?  Thank you.

[AmyC · Accepted solution]

Correct, MI income is not taxed in SC. You will not owe SC since you have a loss but are required to file the return for a rental property.

When you go through the SC program,

1. go until you see the screen says South Carolina Part-Year and Nonresidents.
2. Enter the following items earned in SC OR while a resident.
3. It shows you all of your income categories and asks how much is SC.
4. Leave everything blank except the rental loss. Enter that amount.

[syoung123]

Thank you for the info.  Just to confirm, has the TurboTax Michigan state return program been updated to reflect any applicable changes?  Also, same question for South Carolina.  

[DMarkM1]

Michigan state interviews are updated to reflect conformity to the Federal American Rescue Plan that excludes up to 10,200 of unemployment benefits from tax.  SC has not conformed to the American Rescue Plan act. So for your purposes with only rental income/loss, the SC interview is up-to-date.  

[syoung123]

Thank you for your confirmation that Michigan state return is up to date, and South Carolina unemployment benefits rules don't apply to me since I am a non-resident and the unemployment income was from Michigan (nothing from SC)