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Where do college students pay income taxes?

mootmommootmom Posts: 4,162Registered User Senior Member
edited January 2013 in Parent Cafe
This came up in one of the now-disappeared threads, but I think it's worth its own thread. So. Where *do* college students pay state income taxes?

Do they pay in the state where their parents live? In the state where they go to school? In the state where they hold a driver's license? In the state where they are registered to vote? In the state where they earned the money?

What if not all of these answers are the same, which trumps which? Or do they have to pay taxes (or at least file returns) in *BOTH* states?!

(And if they pay in the state where their school is, since they earned the money there during the school year, that would kind of stink because they still don't get in-state tuition since they're not considered residents.) Thanks for any wise information!
Post edited by mootmom on
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Replies to: Where do college students pay income taxes?

  • hazmathazmat Posts: 8,435User Awaiting Email Confirmation Senior Member
    Taxes are Federal and State. If your student earned money in one state and has permanent residence in another he may pay taxes in both places.
  • mootmommootmom Posts: 4,162Registered User Senior Member
    Right, that's exactly the question: he "may" pay state taxes in both. What is the actual answer, does anyone know?
  • hazmathazmat Posts: 8,435User Awaiting Email Confirmation Senior Member
    It depends on the state and the amount of earnings. Also......are you speaking about getting back money that was withheld or paying money that is owed? Then you have the consideration of tax deductions verses tax credits. There is a lot to consider and how much money are you really talking about?
  • mootmommootmom Posts: 4,162Registered User Senior Member
    I'm asking what I think is a simple question.

    Before starting college, students who live at home and work have no problem: they file state taxes in their home state.

    Once a student moves to a different state for college, and presuming they earn some money at college, they are obligated to file a state tax return along with their Federal return.

    What factors, if any, affect which state the student must file state taxes in? And under what conditions would he be required to file in both his original home state and his college home state?

    I'm guessing there are parents here whose children have gone through this. ;) Anyone have the scoop for those of us just going through it for the first time? Thanks!
  • cnp55cnp55 Posts: 3,440Registered User Senior Member
    Once a student moves to a different state for college, and presuming they earn some money at college, they are obligated to file a state tax return along with their Federal return.

    What factors, if any, affect which state the student must file state taxes in? And under what conditions would he be required to file in both his original home state and his college home state?

    It's going to depend on the states involved.

    The answer is probably filing a non-resident tax return for the college state *and* a resident tax return for the home state. As I recall, the student taxpayer gets credit on the home state return for taxes paid to another jurisdiction.

    Generally speaking, especially for dorm living students, you don't change your state of residence simply by going to college out of state.

    Check with your tax professional as your mileage may vary (by state)!
  • hazmathazmat Posts: 8,435User Awaiting Email Confirmation Senior Member
    Well lets see: I am a student. For two years I had legal residence in one state, schooled in another stated and earned money there.....summer job in third state and of course earned money there. I filed in all three states. Yup that is how it worked for me.
  • dmd77dmd77 Posts: 7,621Registered User Senior Member
    S's official residence is here in WA (no state income tax) but he also files a MA non-resident state return. D's official residence is also in WA, but she files an OR non-resident state return. Our accountant puts their residence with us, since they are still our dependents.
  • thumper1thumper1 Posts: 34,945Registered User Senior Member
    DS will file a MA non-resident return for his work in MA...and a resident return in CT which is his permanent residence.
  • cangelcangel Posts: 4,127Registered User Senior Member
    Thanks Mootmom for asking my question - it just gets more complicated!!!!!

    If a child only has summer earnings, and they are filing federal just to get their withholding back, do they have to file state? If they have not had any earnings in the college state, do they have to file state return in that state - or just in the home state, where they do have earnings?
  • cnp55cnp55 Posts: 3,440Registered User Senior Member
    If a child only has summer earnings, and they are filing federal just to get their withholding back, do they have to file state?

    I'm an employer in Connecticut. Most (all?) of my part time employees have not earned enough money to have any state income tax withheld. So I don't think they need to file state returns.
  • dadx3dadx3 Posts: 1,497Registered User Senior Member
    Some states tax income from the first $. I know that PA tax is a flat 2.8% from the first $. We are WA residents, (no state income tax), but D files PA income tax when she has earned income at college in PA.

    Generally speaking (I'm not a tax professional so this may not be absolutely definative) there will not be "double" state taxation. You may have to pay tax at the higher of the rates of the 2 states, but credit for taxes paid in one state are typically applied to taxes owed in another state (for example in the case where student earns money in one state but is resident with some income in another state, both of which have a state income tax).
  • gsp_silicon_valleygsp_silicon_valley Posts: 1,542Registered User Senior Member
    mootmom, if a student has a workstudy or other job during the school year, his earnings may be subject to tax withholding. The student may have to file a tax return in that state, and depending on total wages earned, may or may not have to pay taxes. Even a stipend earned from a summer internship may be subject to tax withholding. Students may be exempt form paying taxes if they qualify for "nonresident status."

    It all depends on the tax laws in the state where the student is earning wages. Every state has its own policy.

    Following is a Pennsylvania policy:

    My parents live in another state and since I left for school I have only been back to visit on the holidays. I have a job in Pennsylvania to help support myself while I am in school. How and where do I file my
    state income tax return?


    Unless a student considers Pennsylvania to be his/her new home, is supporting himself/herself, and has established a permanent abode in Pennsylvania, the student is considered a nonresident. The student
    should file as a resident in the state where his/her parent(s) live, and file a tax return in Pennsylvania as a nonresident.
  • Sookunfyooz3dSookunfyooz3d Posts: 214Registered User Junior Member
    I live in Maryland and will file my MD tax return since I worked during the summer. I'm guessing, from what I'm reading, that although I do work in Virginia for school that since it doesn't list ANY income tax withheld(federal or state), that I don't have to file for these earnings at all?
  • walkinghomewalkinghome Posts: 6,878Registered User Senior Member
    We live in PA, daughter works (on breaks) here but also at college in IL. She files PA resident tax forms and federal as PA resident. I would think it would matter if the student is a dependent or not also. As far as I know (husband does taxes) she's still our dependent. Will that change after she turns 21 even though everything else is the same?
  • dadx3dadx3 Posts: 1,497Registered User Senior Member
    Whether or not Federal or State taxes are withheld from paychecks does not have any bearing on whether you must pay Federal or State taxes on your earnings. You will need to check the tax law of the state in which you earned income, especially any treatment of nonresident income.

    It is not a perfect analogy, but states with an income tax and cities that have a wage tax have begun going after the income of professional athletes who might have played just one game in their state/city, asserting that a proportional share of their (very large) income was earned in that state or city, and thus nonresident income tax is owed.
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