Reporting Unemployment in 2 states?

[jjrob94]

So, to preface, I lived in Oregon until September of this year, when I moved to New York. I was laid off in March and began collecting unemployment benefits from Oregon (No taxes, state or federal, withheld). When I moved I was told that I was still eligible and should continue collecting unemployment from Oregon while living in New York, which I have done since. 

My question, then, is on which state I should be paying the taxes on my unemployment to. My inclination was that since the money was coming from Oregon, I would just pay Oregon income tax on my benefits for the entire year. But I am wondering if I need to report my unemployment from Oregon as taxable income in New York after my move. If so, do I have to manually calculate the amount I received in each state and report it that way? Does that then mean that I'll be "double taxed" by both Oregon and NY for unemployment received after my move?

Sorry if this is confusing, I am clearly struggling to understand what to do myself! Thank you.

[MaryK4]

Because you moved from Oregon to New York, you will have to file a Part-Year return for each state.  Your unemployment through September will be reported normally, but the amount received after you moved will be Oregon source income received as a nonresident.  The same amount will be included as New York resident income, but you will apply the credit for tax paid to another state on the New York return.

Please ask of you have other questions, this situation is common because of the pandemic and the state rules can be confusing.

[jjrob94]

@MaryK4 Definitely, I figured a lot of people would be in the same boat. I mean to clarify that I did not have taxes withheld from my unemployment and made the mistake of not paying quarterly estimates (never again). So I'm now paying my state income taxes out of pocket.

I started to fill out the non-resident forms, but because my 1099-G did not autofill the amount of income received in each state, I am unclear how to report this. Does this mean I need to do the math myself? And just to be clear, I won't have to pay taxes to both Oregon and New York  for Sept.-Dec.?

Thanks again!

[MaryK4]

Yes, you will have to manually compute how much was earned after the September move to determine how much to report.  You will pay the tax to Oregon, then when you file the New York you will get a credit for the amount you paid to Oregon (on the same income) so you are not taxed twice.  Because of the states involved (Oregon and New York) your situation is a bit more complicated because not all states require the Unemployment to be reported after you move out of the state.  

@jjrob94

[jjrob94]

@MaryK4

I think I'm following. Sorry to ask so many questions about this, I just know my situation is complex and am nervous about making a mistake. 

When I'm entering my income for Oregon, there's a page titled "Oregon source income and adjustments." Below, the amount of unemployment I received is displayed, along with a box where I'm instructed to report the income I received while either an Oregon resident or from an Oregon source. Based on what you're saying, I would enter the full amount there? Because while only part of my benefits were received in Oregon, all of it was from an Oregon source. So I'll then file Oregon and then the credit will appear? 

When entering income in New York, I am shown a "New York resident income page" where I'm told to enter "any federal income received while [I was] a resident of New York state." Like the Oregon page, it has a box displaying my total unemployment earnings and another where I disclose how much I received in New York. If I input any amount there, the amount I have to pay for New York goes up and what I owe Oregon remains the same.

To be clear, filing Oregon first will give me a credit that I can then apply to my New York tax amount? I guess I just don't understand how Oregon will know to give me a credit, because I don't enter anywhere in my Oregon return the date I moved. 

Just out of curiosity, how would this have worked if I had Oregon withhold federal and state taxes from unemployment benefits throughout the year? I had been going to do that this year, but now I'm not sure if that would be more complicated come next year's tax season (I would be having state taxes withheld at Oregon's rate, despite not having to pay Oregon income tax on them because I'm receiving them in New York). 

Again, thank you so much for your help. 

[MaryK4 · Accepted solution]

The Oregon Box asks for the combined amount so it will be the total Unemployment received.  

You should have seen a New York Resident Income page where you entered amount is the September to December part, then the New York Nonresident amount (which is zero).

You will have to continue until you see the Take a look at New York credit and taxes- select Taxes Paid to Another State. (See below).  It will ask you the other state (select Oregon) then Income Taxed by Oregon- which is the total amount. (Your New York box here is the same amount).  For Tax Computed on Your Oregon Return- enter the OR Tax Due at the top. Continue to the end and on the Summary it should show little or no tax owed (depending on your other income)

@jjrob94

[jjrob94]

@MaryK4 Thank you so much! This worked perfectly.

[jjrob94]

@MaryK4 Sorry to revive an old thread, but I figured you might be able to help with this given your familiarity with my situation. I went to file but am seeing a message prompting me to "Fix" my NY return, specifically form IT-558, line A-011. When I click it, it asks me to enter my "unemployment exclusion." I am assuming it will be 0, given that the next form--the "Part-Year Resident/Nonresident Allocation Worksheet"--shows the $10,200 unemployment credit as being applied to my federal and non-resident period columns. I'm just really not sure what to do. 

Any help is appreciated, thank you!

[npierson7]

You correctly stated in your question what to do: put 0 as "unemployment exclusion" for NY, and $10,200 for federal and non-resident period columns.