Welcome to College Confidential!

The leading college-bound community on the web

Sign Up For Free

Join for FREE, and start talking with other members, weighing in on community discussions, and more.

Also, by registering and logging in you'll see fewer ads and pesky welcome messages (like this one!)

As a CC member, you can:

  • Reply to threads, and start your own.
  • Post reviews of your campus visits.
  • Find hundreds of pages of informative articles.
  • Search from over 3 million scholarships.

Did your kid get tax residency at their OOS school? If so when and how?

13

Replies to: Did your kid get tax residency at their OOS school? If so when and how?

  • calmomcalmom Registered User Posts: 20,347 Senior Member
    You don't have to intend to be a resident of a state forever in order to declare residency. Obviously people move, they don't lose their legal state residency the day they decide they want to move.
  • Twoin18Twoin18 Registered User Posts: 1,093 Senior Member
    @calmom As per post #23: "You are considered a resident of Utah if your principal place of residence is in the state and you have the intention of making your residence here permanent or indefinite." (https://voteinfo.utah.gov/).

    Most states have a similar "permanent or indefinite" requirement although they express it differently. As @BelknapPoint noted, your residency changes not at the time you form the intent to move state but when you take the first affirmative action to demonstrate that intent (like registering to vote in the new state).
  • bclintonkbclintonk Registered User Posts: 7,637 Senior Member
    edited March 10
    To return to the original topic, for tax purposes it's possible to be a resident of two states at the same time, depending on the states' rules. Residency for tax purposes doesn't depend on where you register to vote, and it doesn't necessarily depend on where you consider your primary or permanent residence to be. Many states say that if you live and work in the state for more than half the year, you're a resident for tax purposes, even if you're a permanent resident of another state. Here, for example, is what Minnesota's rules say:
    183-Day Rule

    You may be considered a Minnesota resident for tax purposes under the 183-day rule, even if you have permanent residency in another state. Under this rule, you are considered a Minnesota resident for tax purposes if both of the following conditions apply:

    * You spend at least 183 days in Minnesota during the year. Any part of a day counts as a full day.
    * You or your spouse rent, own, maintain, or occupy an abode. An abode is a residence in Minnesota suitable for year-round use and equipped with its own cooking and bathing facilities.

    And Minnesota makes it clear this rule also applies to students:
    If you are . . . A resident of another state attending school in Minnesota

    Then . . .You may be considered a Minnesota resident if you meet the 183-day rule.

    This is not necessarily a desirable status, since both the state where the student is working while attending school and the student's home state might consider the student a resident and subject to taxation on that basis---though often the home state will give credit for taxes paid to the second state.
  • bclintonkbclintonk Registered User Posts: 7,637 Senior Member
    Twoin18 wrote:
    I reviewed the details for a handful of states and couldn't find any that didn't indicate either implicitly or explicitly that you need to be a permanent resident of the state to vote there.

    I think you're confusing the concepts of domicile and residence. Legally, you can't have more than one domicile, or "permanent residence" (which some people refer to as "legal residence"). But you can be domiciled in one state and have actual residence in another. As the Legal Dictionary (online) explains:
    A distinction is recognized between legal and actual residence. A person may be a legal resident of one place and an actual resident of another. He may abide in one state or country without surrendering his legal residence in another, if he so intends. His legal residence may be merely ideal, but his actual residence must be substantial..

    Some states say you need to be a permanent resident (or domiciliary) of the state to vote there. Others merely say you need to actually reside there for a certain number of days to be eligible to vote. For example, Wisconsin says:
    Elector residence. Residence as a qualification for voting shall be governed by the following standards:

    (1) The residence of a person is the place where the person's habitation is fixed, without any present intent to move, and to which, when absent, the person intends to return.

    Unlike the Utah statute, that doesn't say anything about intending to stay in the state permanently or indefinitely. It just says you need to actually live there, without any present intention to move. By this standard, a student from Minnesota who is attending the University of Wisconsin and actually living in an apartment in Madison is eligible to register to vote in Wisconsin, even if she remains a domiciliary (or "permanent resident") of Minnesota.

    Registering to vote in another state might be one indicator of intent to change domicile, but it's only one of many, and all states say no single indicator definitely decides the question. Sometimes people want to claim domiciliary status in a state where they own property for purposes of, e.g., getting a homestead tax exemption. Mere voter registration or a record of actual voting by itself doesn't guarantee that domiciliary status will be recognized. As one Florida law firm explains:
    There is no “bright-line” test to establish domicile in Florida. A Florida court will review a
    person’s particular “facts and circumstances” to determine whether such person is domiciled in
    Florida. The actions set forth below can be taken to establish favorable facts and circumstances
    indicating that you are domiciled in Florida. Again, as there is no bright-line test, the more
    actions you take, the more likely you will be considered domiciled in Florida.

    Among the factors a court will consider: voter registration and actual voting history, location of bank accounts and safety deposit boxes, driver's license, motor vehicle registration, address used on your federal tax returns, declaration in a will or trust that you are a legal resident of the state, address used in business transactions and charitable activities, address used on credit cards and insurance policies, address listed on U.S. passport, address listed as primary residence on homeowner's insurance policies, places of employment,location of professional relationships (doctors, lawyers, accountants, etc.), social, religious, and other organizational memberships. The list goes on, but you get the idea. Changing your voter registration doesn't, by itself, definitively determine a change in domicile, which is determined by the sum total of all your most important relationships, assets, business ties, etc., coupled with an intent to make that place your permanent home.


  • natty1988natty1988 Registered User Posts: 235 Junior Member
    @calmom true, but this seems awfully complicated for college. Do most college students declare residency where they attend college? I didn't when I attended college out of state...like I stated before I declared residency only when I decided I was staying there.....
  • Almondjoy1Almondjoy1 Registered User Posts: 96 Junior Member
    I just want to reiterate what bclintock said. My son is a tax resident of two different states (where he attends college and our home state) because they use different rules. In his case, it doesn’t matter, as his income is low enough that he doesn’t owe in either state. So you need to check the rules of your home state to be sure your child loses tax residency there.
  • BelknapPointBelknapPoint Registered User Posts: 4,131 Senior Member
    My son is a tax resident of two different states (where he attends college and our home state) because they use different rules.

    If he did have to file a return in both states, would he file the resident return in each of those states? Or would he file a resident return in one state and a non-resident return in the other state? The latter situation is much more common. Many people are a "tax resident" (I take that as meaning a person has a legal tax obligation) of multiple states, because income will be taxed by the state in which it was earned, but that doesn't mean that the person is a legal resident of two different states at the same time. Tens of thousands of college students have a summer job in their home state and also are employed in a different state while away at school. If a tax return is required in either or both states, typically the student will file a non-resident return for the state where the school is located in order to pay taxes on the income earned there, and/or file a resident return for the home state, unless the student has taken one or more affirmative actions to actually become a legal resident of the state where the school is located.
  • bclintonkbclintonk Registered User Posts: 7,637 Senior Member
    If he did have to file a return in both states, would he file the resident return in each of those states? Or would he file a resident return in one state and a non-resident return in the other state? The latter situation is much more common. Many people are a "tax resident" (I take that as meaning a person has a legal tax obligation) of multiple states, because income will be taxed by the state in which it was earned, but that doesn't mean that the person is a legal resident of two different states at the same time.

    @BelknapPoint, you most certainly can be a legal resident of two states at the same time for tax purposes. Minnesota makes that clear:
    Minnesota residents must pay Minnesota tax on taxable income received inside and outside the state. . . . Minnesota residency is generally defined by domicile (permanent residency) or the 183-day rule. . . . Your "domicile" is the place you intend to make your home permanently or for an indeterminate amount of time. . . .

    You're considered a Minnesota resident for tax purposes (even if you have permanent residency in another state) if you meet both of the following conditions:
    * You spend at least 183 days in Minnesota during the year (any part of a day counts as a full day)
    * You or your spouse rent, own, maintain, or occupy a residence in Minnesota suitable for year-round use and equipped with its own cooking and bathing facilities

    Clearly, under this definition, a person domiciled in North Dakota but working in Minnesota and renting an apartment there, intending to return to North Dakota at year's end, could easily be both a North Dakota resident and an Minnesota resident at the same time. And as far as Minnesota is concerned, that person is responsible for paying Minnesota income taxes on all his income, including income earned in another state or country.

    Some nonresidents must also pay Minnesota taxes on their earnings in Minnesota.
    You are considered a nonresident if your permanent residence (domicile) is in another state and you did not meet the 183-day rule for Minnesota . . . . [As a nonresident] You are required to file a Minnesota income tax return if your Minnesota gross income meets the minimum filing requirement ($10,650 for 2018).

    Nonresidents are responsible only for taxes on income earned in Minnesota.
  • BelknapPointBelknapPoint Registered User Posts: 4,131 Senior Member
    BelknapPoint, you most certainly can be a legal resident of two states at the same time for tax purposes.

    You know, I think one of the biggest problems with this discussion is that there are many different terms being thrown around, maybe some slightly modified one way or another, and not everyone is applying the same meaning or definition to the same term. Not surprisingly, a major contributor to this problem is that there are 50 different sets of state laws that also do not apply the same meanings or definitions to the same term.

    Just a few posts ago, you said that "Legally, you can't have more than one domicile, or "permanent residence" (which some people refer to as "legal residence")." Compare this to your words quoted at the beginning of this post. The slight modifications or qualifiers do not clear up any confusion; I think for the most part they add to it.
  • Almondjoy1Almondjoy1 Registered User Posts: 96 Junior Member
    Belknappoint, he must file a resident return in each state. His situation may well be unique to the two states involved, but I assure you he is considered a tax resident of each state.
  • dentmom4dentmom4 Registered User Posts: 1,151 Senior Member
    I would say he is a taxpayer of each state.
  • blossomblossom Registered User Posts: 9,323 Senior Member
    After 41 posts I'm prepared to declare that this is something determined on a case by case basis because the individual facts of a kid's life, which state is involved, etc. really do matter. There is no blanket rule here.

  • bclintonkbclintonk Registered User Posts: 7,637 Senior Member
    Just a few posts ago, you said that "Legally, you can't have more than one domicile, or "permanent residence" (which some people refer to as "legal residence")." Compare this to your words quoted at the beginning of this post. The slight modifications or qualifiers do not clear up any confusion; I think for the most part they add to it.

    Just to be clear, I still maintain that you can't have more than one domicile, or permanent residence. I said some people call this "legal residence," but I don't endorse that equation because it's highly misleading. For some purposes (such as taxation) you may have legal residence in more than one state at the same time---but that doesn't make both those places your domicile. Nor does having a domicile in another state bar you from being legally considered a resident for tax purposes, as illustrated by Minnesota's 183-day rule. Each state will use its own definitions, but to suggest that because you have only one domicile you can only be considered a legal resident of one place for tax purposes is simply wrong.
  • Twoin18Twoin18 Registered User Posts: 1,093 Senior Member
    @blossom I agree. And for some kids it will be advantageous to get tax residency at their OOS college and give up their home state domicile, while for others it won't be. In our D's case, giving up CA residency is beneficial, because she will escape from CA's kiddie tax on her taxable scholarships (CA is non-conforming to the new federal rules so tax is due on income in excess of $4401 - her standard tax rates would be very low but kiddie tax rates are not), which would be more costly than the $500 federal dependent tax credit we will give up in 2019 (that was my reason for creating this thread in the first place).

    But for most others it will be better to remain a dependent and be domiciled (and therefore likely tax resident) in their home state (whether or not they have to pay taxes as a resident or non-resident in the state where they are attending school). Either way it requires a careful analysis of what outcome you want to achieve and what actions (with registering to vote potentially being one factor) are needed to do that.
  • BelknapPointBelknapPoint Registered User Posts: 4,131 Senior Member
    Just to be clear, I still maintain that you can't have more than one domicile, or permanent residence. I said some people call this "legal residence," but I don't endorse that equation because it's highly misleading. For some purposes (such as taxation) you may have legal residence in more than one state at the same time---but that doesn't make both those places your domicile.

    It's more than just "some people" who equate the terms domicile and legal residence; it's also the largest department of the federal government. Years ago I first became aware of the importance of my personal actions when it came to the legal concept of where my "home" was and what various results might come about because of those actions. I was serving on active duty in the United States Navy, stationed far away from home in a state that didn't have a state income tax, and I learned how I could legally change my state of residence and not have to pay state income tax any longer. Part of the process, in military administrative terms, is completing the DD Form 2058.

    https://www.med.navy.mil/Accessions/Documents/Student Forms/DD2058.pdf

    The terms "legal residence" and "domicile" are essentially interchangeable. In brief, they are used to denote that place where you have your permanent home and to which, whenever you are absent, you have the intention of returning.

    Yes, the primary purpose of this form is telling DFAS (Defense Finance and Accounting Service) whether or not state income tax withholding is necessary from a servicemember's wages, and if so where the withholdings should be sent. And yes, residence and tax situations for servicemembers are different from civilians because of the very different nature of the employment. These differences are recognized and codified in the Servicemembers Civil Relief Act (formerly called the Soldiers' and Sailors' Civil Relief Act). But, the DD Form 2058 does a pretty good job of describing why the concept of state of legal residence/domicile is important and how it can be changed, and this description is not exclusive to military members.

    The formula for changing your State of legal residence/domicile is simply stated as follows: physical presence in the new State with the simultaneous intent of making it your permanent home and abandonment of the old State of legal residence/domicile. In most cases, you must actually reside in the new State at the time you form the intent to make it your permanent home. Such intent must be clearly indicated. Your intent to make the new State your permanent home may be indicated by certain actions such as: (1) registering to vote; (2) purchasing residential property or an unimproved residential lot; (3) titling and registering your automobile(s); (4) notifying the State of your previous legal residence/domicile of the change in your State of legal residence/domicile; and (5) preparing a new last will and testament which indicates your new State of legal residence/domicile. Finally, you must comply with the applicable tax laws of the State which is your new legal residence/domicile.

    Of course, this is just the information provided by one department of one government out of at least 51 different governments that have a stake or an interest in where citizens choose to call "home," so there is no one definitive, black-and-white set of rules we can look to that covers every specific situation. Which is a way of saying, we could argue about this forever, and we could both have valid positions and provide relevant examples to support our position, without ever resolving anything. The facts of each particular situation must be considered independently, and if those facts and a little common sense are applied to the rules that are in play, hopefully a reasonable and supportable result can be attained.
Sign In or Register to comment.