That's how Montana is treating it. 

Michigan is taxing all unemployment over the $10,200 exclusion per person on MI-1040, just as it comes over in the Federal AGI. 

For Michigan credit forms:  MI-1040CR, MI-1040-CR2, MI-1040CR5 or MI-1040CR7 the $10,200 must be added back to income.  Michigan's intention by adding all non-taxable income is to REDUCE the credits they allow.  MI also adds social security, VA disability, and life insurance proceeds along with lots of other non-taxable income to income used for credit calculations.