I have a client who is a Mississippi resident. He worked in the summer in Maryland and he collected unemployment from Maryland. Maryland unemployment collected by a nonresident is not considered Maryland income. However, the MD tax return shows him being taxed for it. Then on the MS side, after it is allocated on form 80-160, it only shows the MD income without the unemployment and computes the MS tax on that rather than on the full amount that he was taxed on in Maryland. I have gone over this many times. If i go to the Federal Nonresident State Allocation Worksheet and enter the amount of unemployment as a "MD amount" it makes matters worse. It subtracts out the unemployment from the MD 505 which increases the MD refund, but on 80-160 it has now subtracted the unemployment from the wages and is computing the tax on that amount which is more than what was actually paid to MD after subtracting out the unemployment. I really feel that this is a glitch in the program. Any ideas who I can talk to about this? Thank you.
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