How long to unemployment benefits last in illinois?

Why do I owe IA $2400 when I had taxes taken out of my Illinois unemployment benefits?

• I received 3 months of Illinois unemployment in 2009. When I requested the unemployment benefits, I stated I wanted taxes taken out. My husband and I filed our taxes and found out we owe the state of Iowa $2400 because of my Illinois unemployment benefits. Now, here is the tricky part. I live in Iowa but work in Illinois. The position I lost my job from was in Illinois, which is why I was able to claim Illinois unemployment. Every other company that I have worked for, has made sure to send my income taxes to Iowa - why didn't this happen with the Illinois unemployment benefits? Is there something that can be done?

• Answer:

  Typically, a state will only withhold federal and that state's own state income tax from unemployment benefits. Be sure to file a return for IL. On your IA return, look for a credit for taxes paid to another state. This will keep your IL unemployment benefits from being taxed by both states.