Question

do I need to file a Michigan non-resident return if I received unemployment compensation from Michigan

Forum|Forum|5 years ago
May 2, 2021
1 reply
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I live in Illinois, work in Michigan (remote from IL), with no Michigan tax withheld , I received unemployment compensation from Michigan with no tax withheld, do I need to file a Michigan non-resident return? Thanks

E

ErnieS0

Yes. Michigan unemployment is taxable to MI. The state recognizes the $10,200 federal unemployment exemption so your MI unemployment may not be taxable but you still have to file a nonresident Michigan return if you are required to file a federal tax return.

Use this chart to determine if you are required to file Michigan Individual Income Tax return

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M

M_C_CAuthor

Thanks for the reply.

I normally do not file a Michigan return when my only Michigan income is from my MI employer

because Michigan is a a reciprocal state of Illinois.

But in 2020, I received some unemployment compensation from the Michigan state and received a 1099 G from Michigan. So I am not sure if need to file a Michigan non-resident return because of this 1099 G. There was no tax withheld in the 1099G.

Thanks

T

ToddL99

Strictly interpreted, the chart posted above( Use this chart to determine if you are required to file Michigan Individual Income Tax return) indicates you have to file a MI non-resident return - only because you have have to file a federal return and have income "attributable" to MI..

Since you work in MI, your unemployment compensation comes from the state of MI (the MI unemployment insurance fund). That unemployment income is, therefore, "attributable" to MI.

You probably won't owe any tax, since MI recognizes the federal decision to exempt up to $10,200 of 2020 unemployment compensation from taxation.

FYI - The "failure to File" penalty in MI is based on your unpaid tax - it you don't owe any tax and don't file, your penalty will be "0"

From What are the penalty charges for failure to file or pay?: Penalty is 5% of the total unpaid tax due for the first two months or portion thereof. After two months, 5% of the unpaid tax amount is assessed each month. The maximum late penalty is equal to 25% of the unpaid tax owed.