Unemployment Income: Moved to a New State (PA) in July but my only income source is Unemployment from Previous State (IL)

[abcd_tcb]

I earned W-2 income in Illinois (IL) through July but lost employment and moved in with family in Pennsylvania (PA) for the rest of the year, where I still reside. 

I collected unemployment benefits from Illinois while living here in PA.   I did not earn any other income in PA, so  I have some questions. 

1) The 10a State Box on my 1099-G was left blank, but I am required to fill in that detail when going through the TurboTax process - I am assuming to select Illinois since that is the state that issued it, but also know this correlates to State Income Tax witheld so want to be sure. 

2) Should I file 2 separate part-year resident returns for IL and PA (what I am currently doing)? 

3) Which state do I file my unemployment benefits received? - From research it seems like PA, but when filling out my part-year resident return there is no space to enter this - unless I manually enter it as Miscellaneous Compensation  with the closest "type of income" being "nonemployee compensation." 

However, 

When filing my IL part-year resident return I receive the following prompt:  

Illinois Part-Year and Nonresidents:

Allocate all or a portion of the income reported on your federal return to Illinois based on the length of your residency or the source of the income.

Enter the amount that applies to the time you were an Illinois resident or to your activities in Illinois. 

Unemployment compensation

Federal Total $X,XXX  

Then I am asked to "Enter the amount that applies to the time you were an Illinois resident or to your activities in Illinois." in the Illinois column. 

I received the money while in Pennsylvania but they pertain to my activities (employers) in Illinois - so I am not sure if I should enter the federal total here or in another place in my PA part-year resident return.  

----------------

4) Finally, since I have earned no income in PA, I am not even positive I should be filing a PA part-year resident return if this unemployment does not apply. 

Thank you so much for any clarification you can provide, it has definitely been an unusual year! 

[AmyC · Accepted solution]

1. Yes, fill in IL

2. PA is not required. You earned less than $33 from PA, while living in PA. 

3. IL wins for taxing the unemployment. You received it based on your IL activities

4. Right, no PA return..

[abcd_tcb]

@AmyC  : Thank you very much for taking the time to clarify all of my questions!  This has definitely been an interesting year to translate to data and your outline puts me more at ease 🙂 

One last question before I file to anyone who might be able to clarify -  

Since I am a PA resident - and that is my mailing address - I am automatically asked to fill out a part-year PA resident return. 

Should I attempt to delete this section (again, automatically generated by TurboTax) instead of filing one for a $0 return (which I assume could add unnecessary confusion to the system)? 

I guess I am just concerned about the possible "red flags" of being a PA resident but not filing a tax return, even though I am filing a federal one.  Or also, filing one part-year tax return even though I assume the norm is multiple part-year tax returns.  

Thank you so much! 

[AmyC]

1. Yes, the program really wants you to file a PA state return. Don't give in to temptation!
2. Your mailing address is not so important, you could have moved there today and filed your return. It does not say where you were in 2020.
3. Delete the state return. Look for a trashcan or delete button. Worst case scenario, delete all the worksheets and sub-forms, then the state using How to Delete   
4. As for the part-year return concern,
   • IL does not care where you moved
   • You could have moved to one of the states with no state tax. No, you decided to pick one of the worst, PA! Save a year of grief.

​​​​​​​Good luck!

[abcd_tcb]

@AmyC 

Thank you for being so helpful!  I am receiving Medicaid through PA so was not sure the extent to which state systems could "communicate" - but tend to overthink these things.  At any rate, it confirms I have not made income while living here. 

I will find the trash can and spare myself the grief! 🙂 

Have a great night! 

[mabridge]

Hey AmyC,

I have a slight variant of that question.  My wife is a flight attendant who lives in NC but flies out of GA.  She received income from her employer for Jan-Mar 2020 then was furloughed in April.  Her paycheck takes out NC state tax.  While on furlough she received unemployment compensation reported on a 1099-G.  This was paid by the Georgia Department of Labor from April->Dec.  Federal and Georgia state taxes were deducted and reported on the 1099-G.  Turbo Tax seems to tax this  as income on NC and wants me to file GA state taxes.   It is as if I am getting taxed by two states on this income.  Is this correct and I need to file both or do I file in NC or GA?  

Thanks in advance for any assistance,

MB

[MaryM428]

Because your wife earned money in two states, you will need to file two state returns this year.  

In the Personal Information section of TurboTax there will be a question about earning money in another state.  Her answer to that question will be yes and she will enter GA.  It is important to do that so TurboTax knows which state to prepare first.

Federal law forbids double taxation by states.  What happens is that you indicate for each state how much of the income was made in that state.  The questions in TurboTax will guide you on how to enter the income allocation for the residential and non-residential state.

@mabridge 

[mabridge]

Thank you!! Will give that a shot. 

[Peaches4021]

I received unemployment from the state of Mississippi but live in Texas I did not receive income from the state of Texas