Do non-residents owe NY state tax on unemployment benefits? Can't find info

Generally, you pay state income tax to the state where you earned the income, not where you live. Since your unemployment is from NY based on NY employment, you'd likely owe NY state tax on it. But there are exceptions based on reciprocal agreements between states. NJ and NY have some tax agreements, but they're complicated.

i had this exact problem last year! lived in CT but got NY unemployment. ended up having to file both states and yes i did pay NY tax on the benefits. was a headache!!

This is a common question with a specific answer. As a non-resident who received NY unemployment benefits, you DO owe NY state tax on those benefits. The taxation is based on where you earned the wages that qualified you for unemployment, not where you currently live. You'll need to file a NY non-resident return (Form IT-203) reporting your unemployment benefits. You'll also file in your home state (NJ), but since NJ and NY have a tax reciprocity agreement, you should receive credit for taxes paid to NY to avoid double taxation. Reference: NY Tax Law Section 631 specifically addresses this situation. You can also find this information in the NYS Department of Taxation and Finance Publication 140.

What if you only worked in NY for part of the year that qualified you for benefits? I'm in a similar boat but worked 6 months in NY then 6 months in PA before being laid off. Got NY unemployment but live in PA now. The whole system is SO CONFUSING!! Every state seems to have different rules and the unemployment office just tells me to ask a tax professional but I can't afford one!!!

My cousin had this EXACT situation last year and ended up getting AUDITED by NY because he didn't file there! Cost him like $2000 in penalties plus the taxes he owed anyway. Don't mess around with this - if you got NY unemployment you need to file NY taxes even if you live elsewhere. That's what the tax dept told him anyway.

I had this same issue and spent HOURS trying to get someone on the phone at the NY tax department. I finally got through using Claimyr (claimyr.com) - they connect you directly to a live agent without the wait. There's a demo video showing how it works: https://youtu.be/Rdqa1gKtxuE The agent confirmed what others have said here - since my unemployment was from NY, I had to pay NY state tax on it even though I live in PA. Saved me from making a costly mistake on my taxes, and the service was worth it to actually speak to someone who could give me an official answer.

wait but I thought unemployment isnt taxable anymore?? I thought Biden made it tax free during covid and they kept that??

Anyone else notice how the NY unemployment website is like deliberately confusing about stuff like this??? They should just have a big FAQ that answers common questions but instead it's like they WANT you to make mistakes!

Just to add one more data point: I worked with several clients in this exact situation last tax season. The definitive answer is that you DO need to file a NY non-resident return and pay NY state taxes on your unemployment compensation if the benefits were paid by NY state, regardless of where you currently reside. NJ will give you a credit for taxes paid to NY on the same income to prevent double taxation. You'll need to complete both the NY IT-203 (non-resident return) and include a credit for taxes paid to another jurisdiction on your NJ-1040. This is spelled out in the instructions for both forms, though I agree it's not easy to find on the regular unemployment website.

I went through this exact situation two years ago when I was living in Connecticut but receiving NY unemployment benefits. Here's what I learned the hard way: you absolutely MUST file a NY non-resident return (IT-203) and pay NY state tax on those unemployment benefits, even though you live in NJ. The key thing to remember is that unemployment benefits are taxed by the state that pays them, not where you live. Since NY is paying your benefits based on your NY work history, they want their piece of the tax pie. The good news is that NJ will give you a credit for the taxes you pay to NY on the same income, so you won't be double-taxed. Make sure to keep all your documentation from both states - you'll need the NY tax payment info when filing your NJ return. Also, don't wait too long to file! NY can be pretty aggressive about going after non-residents who don't file when they should. Better to get it done right the first time than deal with penalties and interest later.

I'm in almost the exact same situation - working in NY but living in NJ and collecting NY unemployment since February. Reading through everyone's responses has been incredibly helpful! It sounds like the consensus is clear that I need to file the NY non-resident return (IT-203) and pay NY state tax on the benefits. One thing I'm still wondering about - does anyone know if NY withholds state taxes automatically from unemployment payments for non-residents? I noticed they took out federal taxes but I'm not sure about state. I don't want to get hit with a big surprise bill if they haven't been withholding anything for state taxes this whole time. Also really appreciate the tip about Claimyr for actually getting through to someone at the tax department. After reading about all the horror stories of people getting audited for not filing properly, I definitely want to make sure I do this right!

I'm dealing with this same issue right now! Living in PA but received NY unemployment benefits last year. After reading through all these responses, it's clear I need to file the NY IT-203 non-resident return. One thing that's been bugging me though - I kept getting different answers from different sources until I found this thread. My HR person at my old job told me I only needed to file in PA, but obviously that's wrong based on everyone's experiences here. It's frustrating how much misinformation is out there about this stuff. Has anyone here used tax software that handles this multi-state unemployment situation well? I'm debating between doing it myself with software or just biting the bullet and paying for a tax preparer who knows the NY/PA rules. The horror story about the $2000 audit penalty has me spooked! Thanks everyone for sharing your experiences - this thread has been way more helpful than anything I found on the official websites.