Hello, Currently I am a high school student in a personal finance class working on a unit that revolves around college savings. the project I am working on involves saving money for a pair of newborn twins to go to college. with this in mind, I was wondering it is required to pay state taxes when you attend an out of state college, and you have ventured form a state that does not have state taxes.
Thanks (:
State taxes are paid on income earned within the state.
Not sure you understand taxes very well. If the students earn money while working at college, they may have state income taxes withheld in that state (but may get it all refunded if their earnings are low).
Or is your question about saving for their education? One option is for the parents to open a 529 account for each kid. The money put in is contributed after tax by the parents, and earnings are not subject to federal income taxes. If the 529 is opened in the state the parents work in, many of those plans also exempt the earnings from state taxes. They can spend it on college in any state, the tax impact won’t change. Parents can open the 529 in another state’s 529 plan if they want to, but then may not get the state tax break.