Question

unemployment paid by Minnesota taxable in Wisconsin?

Forum|Forum|5 years ago
May 4, 2021
1 reply
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My Daughter goes to school and works in Wisconsin. She is a resident of Minnesota. in 2020 she received 7997 in unemployment benefits from the state of MN. I added this when filing federal tax forms. It shows up when I do her MN taxes, which makes sense. It is also showing as income when I do her WI taxes, does that make sense?

Thank You!

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DanielV01

Employee

It depends. While the unemployment income itself is not taxable in Wisconsin if she is not a Wisconsin resident nor deriving unemployment from Wisconsin sources, it is still possible that the income is factored in to determine Wisconsin tax. Many states use a prorate method for determining nonresident tax: they pretend that all of the income is taxable to their state, calculate how much they would tax all of the income, and then prorate the result to the amount of income actually earned in the state. Since Wisconsin did not follow the Federal provision of exempting $10,200 of unemployment benefits, the unemployment might be getting included for this prorate scenario. But otherwise, no, the income is not taxed in Wisconsin.

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