Question

Allocating Unemployment

Forum|Forum|5 years ago
February 10, 2021
1 reply
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Hey there,

I moved to California from NY at the end of 2019. I worked for a NY company remotely for the first few months of 2020 and then was laid off due to COVID. I received NY unemployment while living in California for the rest of 2020. How do I allocate that unemployment at the state level? Does it go to NY because that's where it came from, or do I allocate it to California because I was living there when I received it? In particular I'm stuck on the "New York Income Allocation" part of TurboTax.

Thanks

T

TomD8

Employee

Unemployment compensation resulting from employment in New York is taxable by NY, even if you are now a non-resident of NY.

https://tax.custhelp.com/app/answers/detail/a_id/659/~/are-my-unemployment-compensation-payments-taxed-by-new-york-state%3F#:~:text=Unemployment%20compensation%20that%20is%20part,is%20taxable%20to%20a%20nonresident.

It is also taxable by CA if you were a CA resident when you received it, but you'll be able to take a credit on your CA return for the taxes paid to NY on the income taxable by both states.

Note that the income from the remote work you did in CA for your NY employer is also taxable by NY (as well as by CA), if the work was done remotely for your convenience, rather than as a requirement of your NY employer.

In TurboTax, be sure to complete your non-resident NY state return before you do your home state CA return, so that the credit(s) appear properly.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.