Do I need to report out-of-country income to state?

[mateo87]

What is the name of your state (only U.S. law)? Illinois

For a portion of 2010, I was on unemployment in Illinois. However, later in the year I moved to Mexico and started a business there. I know to report all the income (unemployment + self employment) on my federal return, but do I have to report the SE to Illinois, or just unemployment? If no, won't it throw a big red flag if my state and federal incomes are different?

 

[davew128]

What did your state form instructions say when you read them?

 

[pattytx]

Have you cut all residential ties with Illinois, and now live permanently in Mexico? If so, when during the year did you do this?

 

[LdiJ]

What is the name of your state (only U.S. law)? Illinois

For a portion of 2010, I was on unemployment in Illinois. However, later in the year I moved to Mexico and started a business there. I know to report all the income (unemployment + self employment) on my federal return, but do I have to report the SE to Illinois, or just unemployment? If no, won't it throw a big red flag if my state and federal incomes are different?

You are going to be filing a part year return for IL. That is a separate form from a standard tax return for IL. You will be reporting all your income, but excluding any non-IL income from tax.

If your intent is to remain in Mexico for the long term, you may be able to exclude your Mexico earnings from federal tax as well. See a tax professional.