Question

New York & New Jersey Unemployment

Forum|Forum|5 years ago
February 23, 2021
1 reply
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MFJ - we both are on unemployment and resident of New York. 1 of us worked in New Jersey. New Jersey does not tax unemployment and New York does. Because New Jersey was not taxed in turbo tax, the full amount of both NY & NJ unemployment is being taxed by New York in turbotax. How can this be corrected?

H

HelenC12

It does not need to be corrected. Since residents of NJ don't pay income tax on unemployment, NY taxes your NJ unemployment, if you're a NY resident.

Per NYS Department of Taxation and Finance: Unemployment compensation is taxed by New York State. Report the same amount on your New York State tax return as on your federal tax return.

This rule is similar for those taxpayer's who work in a state income tax free state. If you work in a state that doesn't have an income tax and you're a resident of a "taxable" states, that income needs to be reported on your resident state return.