How to file tax when you live in California but receive unemployment from Michigan

California does not tax unemployment compensation per the instructions for Schedule CA. So calculate your federal tax return, which includes unemployment although $2,400 is free. So if you got $8,400 in unemployment, $6000 will appear on your federal AGI. Then file out CA-540NR if you were a part year resident and enter an AGI subtraction of $6,000 on Schedule CA. I don't know about Michigan, but in general you have to fill out a Michigan tax return.

If you moved during 2009, you would file as a part-year resident in Michigan and as a part-year resident in California. Your California return should be filed on Form 540NR. If you were a California resident on January 1, 2009, you should file as a full year California resident on Form 540, and you have no filing requirement in Michigan unless you had Michigan source income.

Michigan does tax unemployment compensation to the extent it is taxed for federal income tax purposes (i.e., in 2009, anything received in excess of $2,400 is taxable). Unemployment compensation you received while residing in Michigan is subject to Michigan tax. Unemployment compensation received after your domicile changed to California is not subject to Michigan tax. Michigan Letter Ruling No. 87-71,

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