CA resident student attends school in MA. For 2017 student received W2’s from 3 companies in MA and one in CA. Which tax forms need to be completed with 2017 tax return? Should student claim part time residence in MA? Income in MA was over $8,000 nonresident allowance.
An online tax preparation program should be your friend. My younger daughter had income from Minnesota (where she attended college) and Massachusetts (where she worked for a summer) while a resident of Wisconsin. The tax software told us which state forms she needed to file (all three!) and computed how much was owed to each state.
I don’t know the specifics of those states but D has a similar situation. We used TaxAct last year and it took care of both state tax returns for free. The college state return was ridiculously complex for her very low earnings, but the program did most of the work.
In general, if the student comes home in the summer, they maintain their original state of residence.
Residency is not something you can just decide. Each state has rules and rules may be different for different purposes. I suggest googling “MA state income tax nonresident” and look for the definition.
Is summer a deciding factor? Most of her earnings were during her summer internship in MA.
need to file in both states.
Both forms have columns will allow you to apportion the income the appropriate state, which in this case, is MA. So, on the California form, she’d show $8k of income and $0 of that in California.
My kid had the same thing. He filed taxes his federal income taxes using our home address as his permanent address. He had to file a state tax form for our state as a resident…and a tax form in Massachusetts as a non-resident. We did pay for that second state form online…because it was way easier.
One year the same kid had earnings in FOUR states. He filed three as non-resident and one as a resident. He was required to file in each of those four states.
Correct.
This gets trickier. If she lived in a dorm, then she is not considered a resident for tax purposes. If she lived in an apartment off-campus for more than 183 days is considered a resident. But as mentioned upthread, any of the popular tax packages will walk you/her through it.
Taxation of income from wages and salaries is based on where you earn the money, not where you live or your declared permanent residence. That is why the above students needed to file in more than one state. States do not care if you are a student. They do not care what season it was or where you live. They care that the income was earned in their state. Imagine being in professional sports with games all over the country…
Investment income can depend on where you live as opposed to wages. And since that gets declared by companies at the end of the year it only matters where your legal permanent residence is at the end of December. A reason so many snow birds will spend more than six months in Florida and make this state their residence so they have no state income tax. And- we all know that owning property somewhere does not automatically give you state residency (all those OOS vacation property owners are aware of this, they pay local property taxes but still are OOS for tuition et al).
Curious- does Mass. treat residents differently than others when taxing wages/salaries? Never heard of that.
@wis75 well…a little different.
We live in a neighboring state and DH worked in MA. He filed there as a non-resident. I believe non-resident state taxes are a little different than resident ones.
In addition he filed in our state as a resident…but his earnings in MA were at least partially excluded from CT state incomes taxes.
Let me just make sure I understand it correctly. Student need to file State income tax return in CA and only include wages received in CA. Student needs to file non resident state income tax return in MA and only include wages received in MA. Correct?
Here is the next question. In 2018 student will have WA state wages in addition to wages in MA and CA. WA does not have state income tax. What will happen in this scenario?
If there is no state income tax…then there shouldn’t be a state income tax form to file!
@Ballerina016 : I do not think your first paragraph is completely correct, but it’s close. Assuming student is still viewing self as a California resident, I believe ALL income needs to be DECLARED on the California return, but there will be a credit for the taxes paid to another state on out-of-state income.
That actually feeds into the second one. Student may well owe taxes in California on the Washington income … or not. I highly recommend buying a good tax preparation program that can walk you through the questions. We had these issues with a CA resident who had NY and NH income, and I would not have wanted to try to figure it out on my own.
@thumper1 I get conflicted information when I google it. Some suggest that since she is a CA resident she will have to pay state tax at CA rate. Something similar to the use tax I guess.
Not quite. For clarity to the state, she should show all federal wages received in the Total box, and then aportion that amount to how much was received in California, or zero in her case. Yes, California loves to tax anything that moves but if you go thru the hassle of filing the correct forms, the state gets zero. (Both of my SoCal kids ‘worked’ in MA during school or right after, and they paid zero tax to California on their MA earnings.)
It might make more sense if you take a look at schedule CA, Form 540NR (about half way thru the booklet).
Gotta love states’ rights to do things independently. Expectations based on where you are from and what you are used to. The concept of paying income taxes to two states for the same income because you live in one and work in another…
^^I think all states have NR tax forms, and the other ‘home’ state gives you credit for taxes paid to another state. The problem is if you earn income in a state that doesn’t charge income taxes (FL), you don’t get a credit toward the state taxes in your resident state (say NY) because you didn’t PAY any taxes in FL.
You don’t pay twice, but you might pay taxes on income earned in another state to your home state.
Isn’t that the point: ‘laboratories of democracy’… 
Regardless, the OP will not pay tax to California on income earned in MA.
^^^ Correct.