Question

Do i have to file a return in a state where i received unemployment from, but didn't leave in during the year?

Forum|Forum|4 years ago
March 3, 2022
3 replies
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I received unemployment from the state of New York in 2021, however at no point in 2021 did i live in New York (i lived in Wisconsin). Do i need to file both a New York and Wisconsin return? I know i do for Wisconsin (my official address), but wasn't certain about New York. Again I didn't live there for even a day in 2021

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Vanessa A

Yes, you will need to file a nonresident return for NY and a resident return for Wisconsin, even though you did not live in NY at all in 2021. Your unemployment would be considered NY sourced income since it was "earned" while you worked in NY or for a NY employer that caused you to be eligible for the New York Unemployment.

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taxlady28

If you did not have any state withholding from NY, then you really don't need to file a NY return, Only reason to file would be to get back any state taxes paid to NY.

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ErnieS0

Awesome Tax Expert @Vanessa A is correct. New York considers unemployment to be "New York source income".

New York says nonresident are liable for tax for "any income you received related to a business, trade, profession, or occupation previously carried on in New York State, including but not limited to covenants not to compete and termination agreements."

See New York Source Income of Nonresident Individuals, Estates, and Trusts, and Part-Year Resident Individuals and Trusts

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taxlady28

I know there is a lot of discussion on this topic. I do not see unemployment anywhere in your reference. I know some people do interpret unemployment from New York as NY sourced income. I believe that a non-resident of NY does not have to pay NY state taxes on unemployment even if it is from NY. I believe that they pay to their resident state. I would be very interested to see if you can find a source that specifically says that NY sourced unemployment is taxed by NY for non-resident. NY is good at collecting taxes and this comes up often in discussions.

I am not trying to prove anyone wrong but would really appreciate a good resource on this question.

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DianeW777

Yes, you must pay tax on the unemployment you received from New York sources. New York taxes nonresidents on any income derived from New York state sources. Not all states require this but New York does. If I am understanding your questions correctly, your unemployment was from a business within New York. If this is correct, you will need to file a Nonresident Income Tax return for New York.

Yes, you file both a NY and Wisconsin (WI) tax return.

New York Nonresident filing information

In regards to your next question, if some of the unemployment is from sources outside of New York, then you are correct. You will only report the amount applicable to New York that is from New York sources on your New York Nonresident return.

You will need to report the full amount of unemployment compensation on your home state tax return, but you will be able to claim a credit for any taxes paid to New York on any income taxed twice by both states. This will ensure you only pay taxes one time on that particular income.

When completing your return in TurboTax, be sure to complete the Nonresident New York tax return first in order to ensure the credit for taxes paid to another state, pull into your resident state tax return correctly.

@paul-j-heckman

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