My 19-year-old daughter worked some at home this past summer, in Maine. She also earned a little money on campus in Pennsylvania. She is still a Maine resident. For federal taxes, I know she reports her income from both states. For the two state returns, does she include only income earned in the particular state? She earned less than $5,000 total, if it matters.
Depends on the state. DD earned in WI & TX. TX has no state tax so that was easy! WI has two columns you report both incomes and do some calculations, but essentially are only paying on was earned in WI. Of course she lists TX as her domicile state.
Depends on each state’s tax laws. DD worked a summer camp in MA (at below minimum wage) but MA required her to report her unearned income from scholarships that were reported on her federal taxes, once they facctored that in she had to pay $10 to file to get $5 back! we though she would get 100% of the MA tax back because she made so little (way under $5K).
You need to complete the tax return in Maine as a resident…and the one in PA as a non-resident.
Make sure she is required to file state returns in both places. She might not be.
We found the returns to be pretty self explanatory…in terms of what to include. I believe she can free file online at least one of them…check and see.
When we had this situation, it was worth it to us to use a tax prep state form for each state. IIRC, you indicated resident vs non-resident.
I have used TurboTax for years to deal with this issue for my kids (not uncommon for them to reside in one state, and earned money in two other states). It has done a good job at helping sort this. Although of course I check each return carefully (as you should no matter who does them).
My D used an accountant the year she lived in two states and worked in a third - she said it was well worth the money.
+1 to Turbo Tax. The software definitely knows how to handle this and will prompt you/your daughter with the appropriate questions. It’s a pretty common scenario.
OK, sounds like TurboTax will lead me through it.
I wanted to scope it out first, but then I will have D sit down and enter all the info. Her anxiety makes it hard for her to do stuff like this, but she has to learn!
Her brother’s tax situation is more complicated since he’s going to school in Beirut. The money people donate to him for his work with refugees is funneled through a company that reports the income. I get my accountant to help with all that!
Wow, TurboTax rocks! Very well-designed site and program. D entered everything and it went smoothly. Thanks for the help!