Unemployment from one state, withheld taxes but lived in another

[caitgwa]

Hi,

I lived and worked in Florida in 2019 before I was let go. When the pandemic hit I was able to collect unemployment from my former job for just a few months (FL is super restrictive). Their system for UI was a disaster and did not differentiate residents and non-residents. They withheld 10% of my benefits every week for taxes - so I got $90 a week from them. However, I was living in California the entirety of 2020.

Since then, I have not worked so my income was under the $12,400 cut off.

My question is, how on earth do I file this? Do I file the taxes on a CA state return, even though I didn't make enough (and CA doesnt tax UI)? Do I file federally? Do I pay extra to file in FL even though I haven't been there in 16 months, just to get my withheld UI back? And where does the stimulus and extra federal UI come in?

[DMarkM1]

Any taxes withheld were federal taxes not state taxes.  Neither FL nor CA taxes unemployment benefits.  To get those withheld taxes back you will need to file a federal return.  If your only income was the unemployment benefits, then you do not need to file in CA or FL. 

If you filed a 2019 tax return and have been receiving stimulus payments from rounds one and two, then you will be eligible for round three as well. 

If you were ineligible for stimulus payments due to your 2019 return, but became eligible in 2020, then you need to file your 2020 tax return to claim the Recovery Rebate Credit and thus become eligible for the third round of stimulus payments as well.

[caitgwa]

Hi there,

Thank you for the reply!

So apparently I made a hair over $13,000 with my unemployment benefits. CA doesn't count UI as income, or tax it, correct? So I won't need a tax form for CA or FL? And does that mean I'm above poverty line or still within it?

As far as the federal form, TurboTax automatically chose the standard 12,400 deduction for me. So on the final calculation page, it says "taxable income = 1000" (~13k-12,400). Then it says my tax liability is ~100, but I already paid $1,000+ in taxes (withheld) so I'll end up with an $800+ refund. I'm super confused with why the standard deduction took my taxable income down - is that normal? That always happens? 

My taxes until this point were VERY basic, very simple, 1 step W2 situations, so this whole thing is way beyond me.

[JamesG1]

Correct, California does not tax unemployment income.

What you are explaining is standard procedure.

• The standard deduction reduces your gross income to a taxable income. 
• Your gross tax burden is computed from your taxable income. 
• Credits are deducted from your tax due. 
• The result is a balance due or a refund balance.

[caitgwa]

Hi,

Thanks again for the timely reply.

So, for California, because my unemployment was more than $12,000, would I need to file a state tax form? Even though it's not taxable income in my state, isn't that still my gross income? And if your gross income is more than $12,400 it says you have to file a state tax? I'm really confused about this. 

[DianeW777]

California (CA) states that you must file as a resident, if you are required to file a federal tax return.  In other words if you file a federal return strictly to receive a refund and not because you are required to file than you are not required to file a CA tax return.  

You can use this link to decide if you should file a tax return in CA for any potential benefit.  Should I file a CA return?