<p>Suppose a student's permanent residence (and where his parents live) is in state A. His parents will be claiming him as a dependent. He has no income in state A.</p>
<p>He is a full-time undergraduate in state B. Earned about $1K working for the university he attends. State taxes were not withheld. </p>
<p>Worked over the summer in state C. Earned over $5K and was also given free housing, which we believe will be considered a taxable benefit. Haven't seen the W2 for this job yet but I believe S said they were withholding both state and federal taxes from that job. </p>
<p>Spent the most months of the calendar year at school in state B.</p>
<p>I'm thinking that he files as resident in state A and non-resident in state C and does not have to file in state B at all since his income was so low and no state taxes were withheld. Sound about right?</p>
<p>Kid one filed as a resident of our home state. He filed as a non- resident in both his college state AND in the state where he worked in the summer. In both cases, he was required to do so. You really need to check each state for their state tax filing requirements. </p>
<p>DD filed as a resident in our home state and as a non-resident in her college state.</p>
<p>Thanks thumper. We will of course check all the filing requirements. (I have looked at his school state’s requirements briefly and it appears that he is under the threshold to have to file in that state, even as a dependent.)</p>
<p>If they aren’t earning much, I have my kids be sure to claim enough on the W4 so that no withholding is taken out, as some states require you to file taxes if you have anything deducted, even if you get it all back.</p>
<p>D1 is no longer a student and this is her first year of being independent, she will be filing in 4 states this year!!! :(</p>
<p>As my home state has no state income tax, I only need to file as a nonresident in the state where I go to school/work. Unfortunately, that state does not have electronic filing or direct deposit of tax refunds for nonresidents. </p>
<p>It is my understanding that if the students’ home state has higher income taxes than the states where they worked, the student may owe money to their home state or possibly get a partial refund if the tax rate is lower in the home state. I won a small contest and made sure that it and any interest income were counted as income in my home state due to the lack of state income tax.</p>
<p>As students don’t earn much in taxable income, there are many companies online that will allow them to e-file their federal and state income taxes for free. Check with your state or the IRS for options.</p>
<p>I always buy software that allows me one free e-file and I never can use it on my own taxes as we always have some situation or another that makes our return un-e-fileable, so I figured he’d just use my free e-file. Not sure I want to buy all his states for my tax software though, so will probably have him do his various state taxes free online.</p>
<p>If the state where one works is higher than the one where one lives, you wouldn’t get a refund. What you get is credit for taxes paid to another state. The state where you work still requires their taxes due.
For instance, Illinois tax is 5%, while Indiana is 3.4%. Illinois still gets their 5% but Indiana will give you credit for the amount up to 3.4%</p>
<p>If the state where you child attends college is close to your residential state, check to make sure they have tax reciprocity.</p>
<p>MizzBee what exactly does tax reciprocity mean? He goes to school in a neighboring state, but the state where he earned most of his income is not near our home state. But our home state appears to allow you to subtract the full amount of tax paid to another state as a credit against the tax you would otherwise owe to the home state. Both states have high taxes – not sure which is higher though in his income range. I think the state where he worked is higher which should mean he won’t owe additional tax to our home state.</p>
<p>Entomom is correct. One of our kids had to file in a state where if ANY withholding for state taxes was done, you had to file. It was actually amusing…the kid caught the withholding after the first paycheck and had it adjusted. It was for under $3. Yep…still had to file. So she did and got an under $3 refund. I will say, it was the MOST complicated state tax return I’ve ever seen (CA).</p>
<p>We buy tax prep software too. I’m not sure you can “share” your state tax form. I think the state return has to be for the filer of the fed return…the tax prep software imports much of the info.</p>
<p>Does the IRS still have free file…that is what my kids used for the fed tax return. </p>
<p>The states really have to get on board with this for lower income filers! Maybe some have…I know ours has NOT. When my kid used IRS free file, he did a mail in “free” state filing for all of his states. In our home state, that is no longer an option.</p>
<p>I was assuming I could file multiple federal returns with the same copy of the tax software, but perhaps not. If not we will definitely look into the free online options. I know our home state has a free online option.</p>
<p>thumper1, in your home state you cannot file by mail at all anymore?</p>
<p>I usually use the H&R block software and it says “5 free federal e-files included” so I assume that means I can prepare 5 different federal returns using the same software.</p>
<p>Yes, that means you can file returns for 5 different people with the software if you want to. You could prepare even more returns on the software if you want/need to, but would have to either pay extra for the efiles or file them manually beyond the five.</p>
<p>Thanks intparent, that’s what I thought. It comes with one state, so we will definitely have S do his federal and home state using our software. I may or may not buy the summer job state to go with it. He could just do that online (they seem to have a free file also).</p>
<p>If your student needs to file more than one state, it may be worth looking for a VITA site - they are overseen by the IRS, and are volunteer tax preparers. Depending on the site, they may take appointments, or it may involve spending a morning waiting for your turn, but they should be able to prepare most states. You can find their sites through the IRS website.</p>
<p>I don’t anticipate having any trouble doing the multiple state tax returns ourselves. They should each be fairly uncomplicated, and our home state seems the simplest, which should make life easier (since the resident state is the complicated on where you get credits for taxes paid to other states).</p>
<p>I used free-file last year for my kids. Luckily they had free state returns for the states I needed and the TurboTax program was very good at sharing information between the different state returns.</p>