Tax return for student going to college in different state

I am working on a tax return for my DD who spent 10 month in a different state attending school and doing summer internship. Base on this information TurboTax suggests 1) I can’t claim her as a dependent because she lived away for more then 7 month and earned more then $4,050 2) she needs to claim residency in the state she goes to school if I understand this correctly. Is that right that I can’t claim her as a dependent? She earned income working remotely for company in her home state while in school, another company in her home state during her winter internship and third company in her school state for her summer internship. So at this point I am confused what is her residency , state returns she needs to file and whether or not I can claim her as a dependent.

@Ballerina016 that doesn’t sound right to me. My home is my D’s legal residence even though she attends colege OOS. As for claiming her as a dependent you must provide more than 50% of her total support to do that there’s a worksheet for that out there some where.

I would agree, but TurboTax only asked two questions regarding length of staying in other state and if she made over $4050. I don’t know why $4050 is a magical number.

@BelknapPoint ?

My kids have several times lived in a different state during school and also during summer. I have always done their taxes as if living in our home state. I don’t think Turbotax is “doing it right.” I think college students are a special case.

Same here. I’m not a tax expert…but my kid worked and went to college in another state…and did earn over $4000 a couple of years. She filed THERE as a non-resident…and in our state as a resident. Her federal tax return was from our state.

We declared her as a dependent…as we were also funding the VAST majority of her college costs. Like…almost all of them.

Before claiming her as a dependent you supposed to provide as much as 50% [URL=<a href=“http://www.eaglesnewsmedia.com%5Dof%5B/URL”>http://www.eaglesnewsmedia.com]of[/URL] her total support to do that there’s a worksheet for that out there some where. It seems Turbotax is actually not doing it right at the moment.

If your child’s permanent address is still living with you, the time away for school is considered a temporary absence. She “lived with you” while she was temporarily absent. A relative other than a child cannot be claimed as a dependent if they earned more than 4,050. To claim a child 19 and over as a dependent, they must be a student and you must be providing more than half their support.

Thank you @AroundHere . DD is 18 years old. It seems like a glitch in TurboTax. It doesn’t ask me about providing more then 50% and ignoring her age.

Don’t tell turbo tax DD lived away for 10 months. Count the school months as living with you.

https://www.1040.com/tax-guide/taxes-for-families/who-can-you-claim/

I don’t think TT is correct either.

Her domicile is still with you in your home state. If she had income from a job in another state, then she would file a nonresident tax return for that state.

Are you sure you answered all the questions correctly? Try to start over. Your D lives with you all year if she attends school in another state temporarily.

You can claim a child as a dependant in some cases even if they never live with you as in a divorce. They don’t have to be a resident of the same state, and in fact a dependent student can register to vote, get a drivers license and still be your dependent. Read the description of dependent child, not dependent relative.

Thank you everyone. I am going to change my answer to no, she did not live in any other state. It’s just seems that something like student away in school option should be part of the software questions

Some states don’t have a domicilary rule for residency. It’s entirely possible to be required to file resident returns in multiple states.

Based on the facts presented, I agree with what mommdc says in post #12.

  1. Daughter’s time at school in another state counts as a “temporary absence” from her home state and does not, in and of itself, make her a legal resident of the other state for tax purposes.

  2. Income earned while in the other state from a business located in that state is subject to that state’s income tax, and the daughter will likely need to file a tax return for that state as a nonresident. Her home state probably has a provision to credit tax that is paid to another jurisdiction.

  3. OP should still be able to claim daughter as a dependent, if daughter does not provide more than half of her own support and meets the other IRS dependency tests (which it sounds like she does).

See here on pg. 26 under “Exemptions for Dependents” and “Qualifying Child”:

https://www.irs.gov/pub/irs-pdf/p17.pdf?QPP=alt

This could be the case if a taxpayer moved from one state to another during the tax year and established a new legal residence, but you can only be the legal resident of one state at any one time. You can be required to file income tax returns in multiple states, as appears to be the case here, but it sounds like OP’s daughter has been a legal resident of one state for the entire year, and will need to file a return as a nonresident in the state where her college is.