Unemployment from a different state

Forum|Forum|5 years ago
January 20, 2021
1 reply
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I lived in IA for all of 2020, but was furloughed due to COVID in March and had to file and collect unemployment in MN since I lived and worked there for most of 2019. Do I have to pay MN state tax on the unemployment?

JotikaT2

Employee Tax Expert

It depends.

If you received any unemployment income in 2020 from Minnesota, then yes, you potentially will need to pay taxes on the unemployment income as Minnesota does tax unemployment income.

Assuming you received unemployment from Minnesota in 2020 while you were a nonresident of the state, you would only need to file a tax return if your gross income was at least $12,400.

Please see the following link for more information to help you determine if you would have been considered a resident or nonresident of Minnesota.

MN Nonresident filing requirement

You will be able to claim a credit on your Iowa tax return for any taxes paid in MN on the unemployment income. Just be sure to complete your nonresident state tax return (MN) first and then proceed with your resident (IA) state tax return to ensure all of the credits are calculated correctly.

If you are asking about your 2019 income tax return, it sounds like you lived and worked in Minnesota for the entire year. If this is the case, you would still need to file your MN income tax return and report any unemployment income earned in 2019 in MN. You would not have any filing requirements in Iowa if you did not reside there during 2019.

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theelledge

Level 2

I have a similar question. I received unemployment from CA, where I last worked and did not have taxes withheld. I lived in ID the entire time I was still receiving the UE benefits. How should I proceed