Does Minnesota tax unemployment? Or does some of it get subtracted out? This is for a non-resident. (who didn't work there, yet still somehow had their withholding paid into MN and got unemployment from them when they were laid off)
You betcha Minnesota taxes unemployment but how did he end up getting benefits if he never worked there? Minnesota doesn't seek out folks wondering how their job is going and automatically give out unemployment benefits. He would have had to apply for benefits to get them.
If I had to hazard a guess, I'd blame the inept HR dept that got him in this mess to begin with. Thanks for the answer!
I wouls file the MN tax return as a non resident. If he gets all the taxes back then he can not get a credit on his state return. If he gets some back, but not all I would ask for a foreign state credit on the net taxes paid MN
On his own state return, which usually require world wide income I would report the unemployment. Then I would try to get a credit for the net state taxes paid MN. I would be sure to attach what ever paper work your state requires to get a state tax credit for taxes paid to another state.
