Scholarship taxed by two states

Forum|Forum|3 years ago
March 14, 2023
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I received scholarship money in excess of my tuition and fees, and I understand that this is taxable by the federal and state government.

I am a California resident who went to school in California. But I worked a month in Maryland. So I am filing resident California tax and non-resident Maryland tax.

Here is what I don't understand: Even though I went to school in California, resided in California for the entirety of my semester, and am a California resident, the excess scholarship also shows up on the Maryland non-resident form. Is this a mistake?

I see that California gives me tax credit for my Maryland tax, but that still means that California is paying Maryland for their portion of my scholarship tax.

Any input would be helpful.

Scholarships

Hal_Al

Employee

Q. I am a California resident, the excess scholarship also shows up on the Maryland non-resident form. Is this a mistake?

A. Yes

MD, like mot states, starts with the Federal AGI. So it first appears that all you income is being taxed. In the MD interview, you will be aske to allocate each piece of income as MD or non MD. The scholarship is non MD.