MN Tax Rebate Taxable in Other States

[chuckr1]

I received the MN Tax Rebate in 2023 but moved to MI over a year ago. Although it is not taxable in MN, TurboTax for MI is counting this as MI income. Does anyone know if other states, in general, consider a rebate from another state income? I am quite confident I entered the 1099-misc properly in my federal return.

[DawnC]

Your resident state can tax all of your income.   When did you move?  Do you need to file part-year state returns?  Michigan part-year and nonresidents use Schedule NR to report total income and adjustments from the federal return, income and adjustments attributable to Michigan, and income and adjustments attributable to other states.  Everything gets prorated based on your total income.   

[chuckr1]

I moved here in Fall of 2021. I did a part-year return then. The MN tax rebate is for state income taxes paid in 2021 but the checks weren't sent until 2023. We didn't know why we were getting a check from MN until we looked into it. It is taxed by the feds as income but not by MN. Apparently I have to pay taxes on it in MI though.

[DawnC]

Yes, that is correct.  Your resident state can tax all of your income.   MN does allow a subtraction on the MN state return, but you have no need to file a MN return in 2024.