Belknappoint, he must file a resident return in each state. His situation may well be unique to the two states involved, but I assure you he is considered a tax resident of each state.
I would say he is a taxpayer of each state.
After 41 posts I’m prepared to declare that this is something determined on a case by case basis because the individual facts of a kid’s life, which state is involved, etc. really do matter. There is no blanket rule here.
Just to be clear, I still maintain that you can’t have more than one domicile, or permanent residence. I said some people call this “legal residence,” but I don’t endorse that equation because it’s highly misleading. For some purposes (such as taxation) you may have legal residence in more than one state at the same time—but that doesn’t make both those places your domicile. Nor does having a domicile in another state bar you from being legally considered a resident for tax purposes, as illustrated by Minnesota’s 183-day rule. Each state will use its own definitions, but to suggest that because you have only one domicile you can only be considered a legal resident of one place for tax purposes is simply wrong.
@blossom I agree. And for some kids it will be advantageous to get tax residency at their OOS college and give up their home state domicile, while for others it won’t be. In our D’s case, giving up CA residency is beneficial, because she will escape from CA’s kiddie tax on her taxable scholarships (CA is non-conforming to the new federal rules so tax is due on income in excess of $4401 - her standard tax rates would be very low but kiddie tax rates are not), which would be more costly than the $500 federal dependent tax credit we will give up in 2019 (that was my reason for creating this thread in the first place).
But for most others it will be better to remain a dependent and be domiciled (and therefore likely tax resident) in their home state (whether or not they have to pay taxes as a resident or non-resident in the state where they are attending school). Either way it requires a careful analysis of what outcome you want to achieve and what actions (with registering to vote potentially being one factor) are needed to do that.
It’s more than just “some people” who equate the terms domicile and legal residence; it’s also the largest department of the federal government. Years ago I first became aware of the importance of my personal actions when it came to the legal concept of where my “home” was and what various results might come about because of those actions. I was serving on active duty in the United States Navy, stationed far away from home in a state that didn’t have a state income tax, and I learned how I could legally change my state of residence and not have to pay state income tax any longer. Part of the process, in military administrative terms, is completing the DD Form 2058.
https://www.med.navy.mil/Accessions/Documents/Student%20Forms/DD2058.pdf
The terms “legal residence” and “domicile” are essentially interchangeable. In brief, they are used to denote that place where you have your permanent home and to which, whenever you are absent, you have the intention of returning.
Yes, the primary purpose of this form is telling DFAS (Defense Finance and Accounting Service) whether or not state income tax withholding is necessary from a servicemember’s wages, and if so where the withholdings should be sent. And yes, residence and tax situations for servicemembers are different from civilians because of the very different nature of the employment. These differences are recognized and codified in the Servicemembers Civil Relief Act (formerly called the Soldiers’ and Sailors’ Civil Relief Act). But, the DD Form 2058 does a pretty good job of describing why the concept of state of legal residence/domicile is important and how it can be changed, and this description is not exclusive to military members.
The formula for changing your State of legal residence/domicile is simply stated as follows: physical presence in the new State with the simultaneous intent of making it your permanent home and abandonment of the old State of legal residence/domicile. In most cases, you must actually reside in the new State at the time you form the intent to make it your permanent home. Such intent must be clearly indicated. Your intent to make the new State your permanent home may be indicated by certain actions such as: (1) registering to vote; (2) purchasing residential property or an unimproved residential lot; (3) titling and registering your automobile(s); (4) notifying the State of your previous legal residence/domicile of the change in your State of legal residence/domicile; and (5) preparing a new last will and testament which indicates your new State of legal residence/domicile. Finally, you must comply with the applicable tax laws of the State which is your new legal residence/domicile.
Of course, this is just the information provided by one department of one government out of at least 51 different governments that have a stake or an interest in where citizens choose to call “home,” so there is no one definitive, black-and-white set of rules we can look to that covers every specific situation. Which is a way of saying, we could argue about this forever, and we could both have valid positions and provide relevant examples to support our position, without ever resolving anything. The facts of each particular situation must be considered independently, and if those facts and a little common sense are applied to the rules that are in play, hopefully a reasonable and supportable result can be attained.
If you spend 183 or more days (more than half a year) in one state, then by simple math you have spent less than half a year in all other states, so probably the only way you could be considered “resident” for state tax purposes in more than one state is if the other state (the one you spent less than half the year) is the state of your domicile. Any other states in which you spent any time (or, rather, earned any income), you would most likely be considered a non-resident for state tax purposes.
I will also note that at least one state I know of has an exception for students domiciled elsewhere – even if they are in the state for 183 days or more, they are not considered residents (for state tax purposes).