Question

Live in Ohio but have unemployment through Utah

Forum|Forum|2 years ago
December 6, 2023
3 replies
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I live in Ohio but my unemployment claim is through Utah. Who do I file state taxes with?

Employee

Employee

You must file in both states. You file as a non-resident in Utah because the unemployment is derived from work you actually performed in Utah. And you file in Ohio because Ohio taxes all the income of its residents, regardless of the income's source.

Ohio will give you a credit for the taxes you pay to Utah on the dollars that are taxed by both states, so in effect you won't be double-taxed.

With TurboTax, complete the non-resident tax return before the home state tax return, so that the program can calculate and apply the credit.

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

Hal_Al

Employee

Most states do NOT tax unemployment compensation paid to non residents.

Reference: https://ttlc.intuit.com/community/state-taxes/discussion/lived-in-one-state-while-claiming-unemployment-in-another/00/1893581#:~:text=Your%20unemployment%20compensation%20is%20only,on%20your%20Ohio%20resident%20return.

I can find nothing concrete that says how UT handles it. That usually means they do tax it and @TomD8 's answer is probably correct., you need to file in both states. You my want to call the UT tax people and ask em. Let us know what you find out.

T

TomD8

Employee

"Most states do NOT tax unemployment compensation paid to non residents."

I'm not sure that that statement is correct. What I've found is that many states (including Utah) don't specifically address the question. But when they do, unemployment benefits are invariably "sourced" to the state where the unemployment was earned, which means the benefits would be taxable to non-residents.

A few examples:

Colorado:

"Wages and unemployment compensation are Colorado-source income if the employee was physically present in Colorado when performing the work."

https://tax.colorado.gov/income-tax-topics-part-year-residents-nonresidents

Massachusetts:

"Nonresidents are subject to Massachusetts income tax on unemployment compensation that is related to previous employment in Massachusetts."

https://www.mass.gov/info-details/learn-about-tax-treatment-of-unemployment-compensation

Illinois:

"Unemployment compensation included in your federal adjusted gross income is taxable to Illinois if

you earned it while you were an Illinois resident or
you received it from the Illinois Department of Employment Security as a nonresident."

https://tax.illinois.gov/individuals/taxableincome.html

Kansas:

"Modified Kansas source income" means that part of a nonresident individual's Kansas adjusted gross income as set forth in K.S.A. 79-32,117, and amendments thereto, derived from sources in Kansas. Items of income including unemployment compensation, gain, loss or deduction reflected in Kansas adjusted gross income shall be considered derived from sources in Kansas to the extent that they are attributable to: (1) The ownership of any interest in real or tangible personal property in this state; (2) a business, trade, profession or occupation carried on in this state";

https://kslegislature.org/li_2012/b2011_12/statute/079_000_0000_chapter/079_032_0000_article/079_032_0109_section/079_032_0109_k/

Oregon:

"(e) Unemployment compensation. Total compensation includes unemployment compensation benefits to the extent the benefits pertain to the individual's employment in Oregon. If unemployment compensation benefits are received by a nonresident for employment in Oregon and in one or more other states, the unemployment compensation benefits must be apportioned to Oregon using any method that reasonably reflects the services performed in Oregon."

https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=20198

In fact, I have yet to find a state that does not "source" unemployment compensation to the paying state. If I were to take the time to search, I'm sure I could find other examples. But the general principle seems clear.

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