1099 G "Taxable Grants"

[Terry D EA]

First time that I have ever seen one of these. Client is a resident of NC and received a 1099 G from Maryland. No Federal tax withheld or State. Program is generating a MD non-resident State return along with the NC. Shows an amonunt due to Maryland and a credit to NC for taxes paid to another State. I got the NC part but am just a bit confused with the MD. I am assuming that because this money was from MD and earned in NC that it is taxable to MD and only a portion is taxable to NC. Am I on track here or is there something that I am missing. Everything seems right but because I am unfamaliar with this type of 1099G that makes me feel a bit uncomfortable.

[joanmcq]

What is the income for? Unemployment?

I have a client that received UE from NY for a year after he moved out here. Since he's in the performing arts, he still works in NY occasionally. Had to file NY nonresident & pay tax there. If both states tax UE (or what ever type of income it is), then that treatment is correct. Pays tax to MD & gets a credit for tax paid on the resident state return.

[MsTabbyKats]

Yes....it works the same way as unemployment insurance.

It's taxable to the state that pays it....but if you reside in another state, you get a credit.