Discussion:Colorado 104CR

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Discussion Forum Index --> Advanced Tax Questions --> Colorado 104CR


Discussion Forum Index --> Tax Questions --> Colorado 104CR

AndrewN33 (talk|edits) said:

15 February 2011
The state of CO is taxing my CA unemployment because I received it while living in CO. CO taxes any income received while living in the state no matter where the source is. CO even taxes unemployment distributed from its own unemployment. TALK ABOUT KICKING SOMEONE WHILE THEY ARE DOWN!! My CA unemployment shows up on my CA tax return but it is adjusted and not taxed by CA. Can I designate my unemployment as doubly taxed on my CO tax return?

AndrewN33 (talk|edits) said:

15 February 2011
It looks like I answered my own question. CO will give a credit for tax paid to another state up to the entire amount that CO taxing the double taxed income. My tax liability with CA was only 26 dollars, and my unemployment benefits were about half of the income I received from CA. Therefore I can claim a 13 dollar deduction from what I owe CO. But seriously, what kind of a government taxes unemployment?

KatieJ (talk|edits) said:

15 February 2011
No, you are wrong; you cannot claim a credit on your CO return for tax paid to CA on your unemployment compensation, because CA did not tax that income. You can only claim credit for taxes you actually paid to another state on income taxed by that state.

Actually, most states tax unemployment compensation; so does the federal government. You prompted me to do a little multistate study here, out of curiosity. The only states I found that exempt unemployment compensation are Alabama, Arkansas, California, Montana, New Jersey, and Pennsylvania. Of course states with no comprehensive individual income tax also don't tax it -- that would be Alaska, Florida, Texas, South Dakota, Wyoming, Washington, Nevada, New Hampshire and Tennessee.

Most states tax it to the extent it is taxable for federal income tax purposes, and therefore exempted the first $2,400 in 2009. However, Iowa and Wisconsin would have made you add back the $2,400 in 2009.

See, California isn't such a terrible tax state after all <G>!

KatieJ (talk|edits) said:

15 February 2011
Note to Kevin and Trillium: no kittens were harmed in the performance of the study referred to above :).

Trillium (talk|edits) said:

15 February 2011
Actually, Katie, I wouldn't be surprised if your post saves some kittens in the future. Thanks, again, for providing such great info to us here.

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