Tax Question

[ShanghaiMom]

<p>I'm just now preparing the kids 2010 taxes (we file late due to overseas carryovers and I prepare my kids taxes when we receive our tax return from the corporate tax preparers).
My oldest was only home in our state for 3 1/2 weeks of visits in 2010. She worked over the summer and into fall in the state she went to college in and had taxes withheld in that state and city. She has a drivers license in that state and lived in an apartment there year round. She is still a dependent on our return as we provided more than 1/2 of her support. I have prepared her federal return and am working on her state return.
Is she a resident, part-year resident or non-resident in our state? Or in her college state?</p>

[thumper1]

<p>Is your oldest child still a college student?</p>

<p>Well…I’m not a tax expert…but I can tell you about my own kiddo when she was a college student. She came to our state for 3 weeks at Christmas and 2 weeks in the summer. BUT she was a college student and her permanent residence was OURS…in our home state. Our kiddo worked in the state where she attended college. She filed a non-resident state tax return in THAT state.</p>

[ShanghaiMom]

<p>After some research I see she is a resident in our state as long as we provide the bulk of her support. Do I list her as a partial resident with the dates she lived here? or as a full time resident?</p>

[thumper1]

<p>What is a “partial resident”? If she is a college student undergrad and you are providing her support, I would think her permanent address would be in YOUR state…full resident. If her college state requires her to file a return (because she has earned sufficient income), she would do so as a non-resident.</p>

<p>Disclaimer…I am NOT a tax expert. Just a parent who had kids attend colleges out of state.</p>

[ShanghaiMom]

<p>Ok - figured out my own question - she is a full time resident in our state despite only being here 3 1/2 weeks. She will file as a non-resident in the state/city she worked in despite living there most of the year. Seems backwards but that’s how it goes…
I think I have trouble with the residency issue because she never lived here - we moved here after she was in college so it seems odd to say she is a resident!
Michigan has a partial resident classification where your income can be taxed at a percentage of time you lived in the state - when we lived overseas we had to keep track of how many days we were in Michigan.</p>

[thumper1]

<p>Shanghai…ALL college students live MORE in the place where they attend college than in the place where their parents reside. Think about it…college is about 8 1/2 months long each year. Still…residency for undergrad college students is in the state where their PARENTS reside. That is their permanent address.</p>

[mazewanderer]

<p>State Returns are tricky. It depends on the states as she could be a full time in your state but part time in the other state. So it is OK to be a dependent on your federal return but not on your state return. You need to look at the various state rules.</p>

<p>Here are basic federal guidelines</p>

<p>[Can</a> You Claim Your College Student as a Dependent for Federal Income Tax Purposes? - Associated Content from Yahoo! - associatedcontent.com](<a href=“http://www.associatedcontent.com/article/19802/can_you_claim_your_college_student.html?cat=3]Can”>http://www.associatedcontent.com/article/19802/can_you_claim_your_college_student.html?cat=3)</p>

<p>

If you have been claiming a child as your dependent for U.S. federal income tax purposes every year, but this year the child becomes a college student, you may still be able to claim an exemption for that child. But you will need to take various different factors into consideration in making this determination.</p>

<p>General Rules</p>

<p>Before determining whether your college student can be claimed as your dependent, you must first see if you meet some general tests in order to be able to claim an exemption for a dependent.</p>

<p>" If you yourself can be claimed as a dependent on someone else’s tax return, you cannot claim any dependents on your own tax return. And, if you are married filing a joint return and your spouse can be claimed as a dependent on someone else’s tax return you cannot claim any dependents on your joint return either.</p>

<p>" If your dependent is married and files a joint return, you cannot claim the dependent on your tax return, unless your dependent is filing a joint return only to claim a tax refund and there would be no tax liability for either your dependent or his or her spouse if they filed separate returns.</p>

<p>" Your dependent must have been a U.S. citizen, U.S. resident, U.S. national, or a resident of Canada or Mexico for some part of the tax year. You cannot claim an exemption for a dependent who is a nonresident alien for the entire year.</p>

<p>If the above tests are met, you must then determine if the child qualifies as your dependent under the “qualifying child” or “qualifying relative” criteria.</p>

<p>Qualifying Child</p>

<p>Normally you can claim an exemption on your U.S. federal income tax return for a “qualifying child”. To be your qualifying child, five tests must be met: </p>

<ol>
<li><p>The child must be your son or daughter, stepchild, or eligible foster child. Other relationships that would qualify are if the child is your brother or sister, half brother or half sister, stepbrother or stepsister, or any of their descendants (your grandchildren or great grandchildren, for example).</p></li>
<li><p>The child must be under age 19 at the end of the year, or under age 24 if the child is a full-time student. So, your college student could meet this qualification. A child who is permanently and totally disabled is not subject to any age limit.</p></li>
<li><p>The child must have lived with you for more than half the year, except for temporary absences. Education qualifies as a temporary absence, so if your dependent is away at college during more than half the year, he or she could still qualify under this test.</p></li>
<li><p>The child must not have provided more than half of his or her own support for the year. Scholarships received by a full-time student are not taken into consideration as support provided by the student, so this would not disqualify the child as your dependent under the support test. But proceeds from a student loan would count as support provided by the student, if the loan is taken out in the student’s name. If the parents take out a Federal PLUS loan, for example, to pay college expenses, the proceeds from the loan are considered support provided by the parents.</p></li>
<li><p>If the child meets the tests as a qualifying child for more than one person, you must be the person entitled to claim the child as a dependent. This could be the case of a child of divorced or separated parents, or when there is a multiple support agreement.

</p></li>
</ol>

[mazewanderer]

<p>For example this is the Virginia rule</p>

<p>[Virginia</a> Department of Taxation](<a href=“Home | Virginia Tax”>Home | Virginia Tax)</p>

<p>Look at your state rules</p>

<p>

</p>

<p>Actual Residents: – Individuals who are physically present in Virginia, or who maintain a place of abode here for more than 183 days during the taxable year are actual residents. The period of residency does not have to be consecutive days. Most Virginia residents are actual residents of Virginia.</p>

<p>It is possible to be an actual resident of Virginia and a domiciliary resident of another state. For example, dual status commonly occurs when a resident of another state enrolls in a Virginia school and lives here during the school year.</p>

<p>Domiciliary Residents: – Individuals whose state of legal residence in the technical sense is Virginia are domiciliary residents. Most domiciliary residents actually live in Virginia. Examples of individuals who are domiciliary residents but who do not live in Virginia are shown below:</p>

<pre><code>An individual who enters the military from Virginia (i.e., claims Virginia as his/her home of record) will remain a domiciliary resident of Virginia, unless appropriate steps are taken to abandon Virginia as the state of domicile.

A student who attends school in another state, but maintains Virginia as his/her legal state of residence, is a domiciliary resident.
</code></pre>

<p>Students</p>

<p>Students are subject to the same rules for residency and filing requirements as all other filers. For example, if you lived in Virginia for more than 183 days during the taxable year, you are classified as an actual resident, and must file Form 760 even if you maintained your legal residency in another state. If you maintained legal residency in Virginia, but attended school in another state, you are still considered a Virginia resident and must file Form 760. If you had income in the other state, you may be required to file in that state also.

</p>