Unemployment received from one state while living in another

[Anonymous]

Hello!

I was living in Michigan finishing college at the beginning of 2020 and then covid hit. I moved home to Illinois in March of 2020 and filed for unemployment through Michigan (because that's where my job was and they closed due to covid). I received all the unemployment while I was living in Illinois. Once I get to my state taxes, I am asked how much of it was received while I was an Illinois resident and how much of it was received while I was a Michigan resident. Do I say all of it for Illinois and zero for Michigan?

Also, what do I do with the $-10,200 Other Income that keeps popping up? I have to say how much of it was earned in Michigan and how much was earned in Illinois. Would I also put all of it for Illinois and zero for Michigan? Help!!!

[ToddL99]

All of your unemployment was received as an Illinois resident; none of it is Michigan income.

The  negative $10,200 of "Other Income" is the recently passed federal tax exemption for unemployment compensation. ? All of it was "earned" in Illinois, none in Michigan. 

As a student attending college out-of-state, you are considered to remain a resident of (i.e. "live in") your home state unless you take action to establish residency in another state (does not have to be the state where you go to college).  

See "What makes you a resident of a state (or country)?" at the bottom. 

When you complete the Personal Interview: 

1. Select Illinois as the state of residence on December 31, 2020; 

2. Answer "No" when asked if you "Lived in another state in 2020?" That question only applies if you changed your state of residence in 2020. 

3. Answer "No" when asked if you "Earned money in another state?" (Yes, if you earned money in MI before Covid hit) 

What makes you a resident of a state (or country)?   

Generally, you're a resident of a state (or country) if you intend to either stay there permanently, or return there after a temporary absence. It's where home is – where you come back to after being away on vacation, business trip, overseas or out-of-state employment, or school. Many factors are considered, not the least of which are where you are registered to vote, own homestead property and are licensed to drive. 

[Anonymous]

Okay so I won't be filing as a part year resident of both Illinois and Michigan?

I had lived in Michigan since 2017 in apartments during college and filed as a Michigan resident in 2019. 

[KrisD15]

Illinois and Michigan have a reciprocal agreement. You pay tax to the state in which you live on income from the other state. 

In your case, you file an Illinois return and claim that income. 

If there was any Michigan tax withheld, you could file as a non-resident for Michigan to get that tax back. 

The first 10,200 Unemployment is not taxable on your federal return and TurboTax has been updated for that. The state return section has not yet been updated as states are still deciding how they intend to handle unemployment. 

You should have filed the proper paperwork with the Michigan employer when you became an Illinois resident so that only Illinois tax was withheld. 

Reciprocal States