<p>Does our son need to file state taxes in both his state of residence and his college state? He earned "normal" income here in California but his scholarships/grants will count as income at MIT. Does that mean he has to file state taxes there, as well? I hope not!</p>
<p>Yes, if your son has income in both states and both states have state incomes taxes, then he will need file in both states. He will file his taxes in CA as a resident; he will file as a non-resident in Massachusetts.</p>
<p>D2 has filed her taxes in as many as 3 different states in one year. (Home state, college state, summer internship/fellowship state)</p>
<p>Unfortunately, Massachusetts is more complicated than most states when it comes to determining whether you need to file or not. It will depend on both the amount of money earned in Massachusetts, as well the total amount of money that was eaned. Here is a link that gives some non-resident examples on how to calculate whether you need to file or not.</p>
<p>[Who</a> Must File](<a href=“http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/filing-requirements/who-must-file.html#Nonresident]Who”>http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/filing-requirements/who-must-file.html#Nonresident)</p>
<p>Well I think Taxes are Federal and State. If your son earned money in one state and has permanent residence in another state he might have to pay taxes in both the places.</p>
<p>His scholarships/grants income was $4,196. Does it look like like he needs to file Ma. state taxes? That link was utterly confusing. :-(</p>
<p>Read the link slowly and carefully. Under “non-resident - examples”, look at the example for a single taxpayer. It walks you through it step-by-step.</p>
<p>Ok, I’ve read it several times. But here’s the thing:</p>
<p>“Nonresident Massachusetts gross income = income earned from Massachusetts sources.”</p>
<p>"Nonresident - Examples</p>
<p>Definition of Massachusetts Gross income is Massachusetts source income. </p>
<p>Definition of Total income from all sources is Massachusetts gross income plus non-Massachusetts source gross income; or income that would be included if a taxpayer were a full year Massachusetts resident. </p>
<p>Prorated personal exemption amount is the total amount allowed to a resident multiplied by the Deduction and Exemption Ratio, Line 14g, the numerator of which is Massachusetts gross income and the denominator of which is total income as if the taxpayer were a full year resident. </p>
<p>Example 1 - The Pro-Rated Personal Exemption Test illustrates that a nonresident having less than $8,000 Massachusetts gross income is still required to file if such income exceeds the personal exemption to which the nonresident is entitled.</p>
<p>Single taxpayer:</p>
<p>Massachusetts gross income = $7,500
Total income from all sources = $15,000
Line 14g, Ratio of Massachusetts gross income to total income = $7,500/$15,000 = 50% (.50)
Prorated personal exemption allowed = $4,400 X .50 = $2,200
Taxpayer is required to file since Massachusetts gross income exceeds the prorated personal exemption of $2,200. "</p>
<p>It all depends on how you apply the grants and scholarships! I could easily say that my son’s income (resulting from an excess of grant/scholarship monies above qualified expenses) is from his National Merit Scholarship of $3,000. That would only leave MIT’s portion at $1,196; that is, his Mass. income is $1,196, so he would not qualify because the personal exemption is over that.</p>
<p>But then do we just ignore the NM Scholarship? What exactly does someone do with that?</p>
<p>You’re not applying the formula correctly:</p>
<p>He had $4196 in scholarship income
he had some amount of other income</p>
<p>His prorated exemption will be (MA scholarship/total income) x $4400
If the MA scholarship is greater than that prorate exemption, he must file.
If his total income is greater than $4400, then this will be the case.</p>
<p>Did he earn more than $204 in wages? If he did, his total income will be over $4400, and he will be required to file a MA tax return as a non-resident.</p>
<p>Ok, I think I see now. The actual numbers are</p>
<p>MIT grant (I won’t count the NM scholarship because it’s <em>not</em> MA income; he did <em>not</em> earn that in MA)/total income times $4400:</p>
<p>$1196/$6134 (Ca. income plus MIT grant) = 19.4%
19.4% X $4400= $853.60</p>
<p>Based on this, he would file state taxes because $1196 is greater than $853.60.</p>
<p>Nope, I was wrong. In digging deeper, I found this page:
[Directive</a> 95-9: Tax Treatment of Scholarships…](<a href=“http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-decade/1990-1999-directives/directive-95-9-tax-treatment-of-scholarships.html]Directive”>http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-decade/1990-1999-directives/directive-95-9-tax-treatment-of-scholarships.html)</p>
<p>And this statement:</p>
<p>Scholarship and grant amounts that are received by a non-resident and specifically designated for use for living expenses, however, are not subject to Massachusetts personal income tax, since they are not connected to an activity specified in G.L. c. 62, § 5A(a).</p>
<p>And here’s another page that says the same thing:</p>
<p><a href=“http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/income-excluded/other-items-specifically-excluded.html#Scholarships[/url]”>http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/income-excluded/other-items-specifically-excluded.html#Scholarships</a></p>
<p>Nonresidents are taxed only on items of gross income that are derived from or effectively connected with any trade or business, including 1) any employment carried on by the taxpayer in Massachusetts; 2) the participation in any lottery or wagering transaction in Massachusetts; or 3) the ownership of any interest in real or tangible personal property located in Massachusetts.</p>