My wife left her job in IL to join me in NY mid last year. While in NY she filed an unemployment claim which was approved. So in NY she receives unemployment income from IL. Does she report the unemployment income on our NY or IL state return?
The State of Illinois treats unemployment benefits as Illinois source income and it taxes those benefits whether you are a resident, nonresident or part-year resident of IL. Her part-year IL resident return would have to include the unemployment benefits received in 2017. If she is a part-year resident of NY and receiving unemployment benefits from IL, then NY is also going to tax that income. However, NY will allow a resident credit for taxes paid to IL on those benefits. The credit can not exceed the NY tax on those benefits.
Thanks. What would the point be of reporting the income on NY return if I get a "credit" for the taxes paid to IL? Why not just report it on IL and forget about reporting it on NY?
First of all, it's what the law requires. Second, if taxes in NY are higher than they are in IL, they you will have to pay the difference to NY.
I doubt this will make more than $50 difference in my NY tax bill. So it seems overkill in complexity.
How do I go about adding the "credit" for my IL tax on the NY return? Is it a separate form to fill out or some field to enter it?
Form IT-112-R
-- Arthur L. Rubin
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