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EDD taxes for multi-state unemployment - CA resident receiving HI benefits

I'm in a weird tax situation with unemployment and hoping someone here has dealt with this before. I live in California but my claim was approved through Hawaii since I had wages there. I'm getting about $800/week from Hawaii UI, but I'm confused about how taxes will work. Hawaii taxes unemployment benefits but I'm a California resident. Will California ALSO tax this money when I file next year? Do I need to file state taxes in both places? I'm trying to figure out how much to set aside for taxes so I don't get hit with a surprise bill next April.

Jasmine Hancock

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yep ur gonna need to file in both states. happened to me when i worked in nevada but lived in CA. had to do two state returns & it was a pain

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James Maki

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Ugh, that's what I was afraid of. Did you end up owing taxes to both states? I'm trying to figure out if I should be setting aside 20% or more like 30-35% for taxes.

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Cole Roush

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This is a pretty common situation for people who work across state lines. As a California resident, you'll need to file a resident CA tax return reporting ALL income (including the HI unemployment). You'll also need to file a non-resident Hawaii return for the unemployment benefits received from Hawaii. The good news is California offers a credit for taxes paid to other states to avoid double taxation on the same income. So while you file in both places, you won't be fully taxed twice on the same money. Make sure you elect to have taxes withheld from your UI payments if possible - it'll make things much easier next tax season.

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James Maki

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Thank you so much for explaining this! Hawaii is already withholding their state tax (I made sure of that), but California hasn't been mentioned anywhere in my paperwork. Should I be making estimated tax payments to CA throughout the year?

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NOBODY TOLD ME ABOUT THIS when I had UI from Oregon!!!! I only filed CA taxes and now I'm getting letters from Oregon saying I owe them $1,200 in back taxes PLUS penalties!!!!! The EDD should warn people about this stuff but they don't care at all about us!!!!!

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Arnav Bengali

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Unfortunately, EDD (California's unemployment department) wouldn't necessarily know about your Oregon unemployment benefits. Each state's UI system operates independently. This is definitely something tax preparers should catch though.

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Arnav Bengali

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I helped my brother with this exact situation last year (CA resident, Arizona UI benefits). Here's what you need to know: 1. You WILL need to file both a CA resident return and a HI non-resident return 2. Hawaii will tax your unemployment benefits at their state rate 3. On your CA return, you'll report your total income including the UI benefits 4. CA has a "Credit for Taxes Paid to Another State" (Schedule S) that will reduce your CA tax by the amount you paid to Hawaii 5. You won't be double-taxed, but you will pay the higher of the two state tax rates The bigger issue might be reaching someone at the Hawaii unemployment office if you have questions about your claim. Have you tried contacting them?

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James Maki

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I've been trying to call Hawaii's unemployment office for two weeks with questions about this but can never get through. I keep getting a message that they're experiencing high call volumes. It's so frustrating because I have no local office to visit.

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Sayid Hassan

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I had a similar issue trying to reach out of state unemployment offices. After wasting hours trying to get through, I found a service called Claimyr that got me connected to an actual person at the unemployment office. Their system basically keeps dialing until it gets through and then calls you when there's an agent on the line. Saved me days of frustration. They have a video showing how it works at https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km and their website is claimyr.com. Might be worth checking out if you're still stuck trying to reach Hawaii's office.

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James Maki

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Thank you! I'll definitely check this out. At this point I'd try anything to talk to a real person. I have so many questions about my claim that only Hawaii UI can answer.

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Jasmine Hancock

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does hawaii tax unemployment at the same rate as cali?? cuz maybe u could just have them withhold extra to cover both lol

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Arnav Bengali

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That's not how it works. Each state has their own tax forms and systems. Hawaii can only withhold Hawaii taxes, not California taxes. The OP would need to make estimated tax payments to California separately if they're concerned about owing at tax time.

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Rachel Tao

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My cousin had FLORIDA unemployment but lives in California and she said she didn't pay any state taxes on it because Florida doesn't have income tax! But I think Hawaii does so you're probably not so lucky.

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Cole Roush

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Your cousin still should have paid California state taxes on that Florida unemployment. California taxes all income of CA residents, regardless of source. If she didn't, she may get a surprise bill from the California Franchise Tax Board eventually.

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Derek Olson

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I'm dealing with this right now too, but with Washington unemployment. I talked to a tax professional and they explained that CA will give you credit for taxes paid to other states, but you have to file carefully. It's called the "Other State Tax Credit" on the CA return. Just keep track of how much Hawaii withholds.

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James Maki

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Thanks for sharing your experience! I'm definitely going to talk to a tax professional before filing next year. Sounds like I need to keep careful records of everything.

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Arnav Bengali

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One more important thing: make sure Hawaii has your correct mailing address so you'll receive your 1099-G form for tax filing. They'll send it in January, and you'll need it to properly report your unemployment income. If you don't receive it, you can usually request it online through Hawaii's unemployment portal.

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James Maki

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Good point - I made sure they have my current California address. Hopefully everything goes smoothly with the tax forms.

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