College Student's Income in a Different State than Home State

Forum|Forum|2 years ago
April 9, 2024
1 reply
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I live in CA and if I claim my college student daughter as dependent, she has a scholarship and lab assistantship income from MA. Do I need to file both CA and MA tax state returns just she needs to file MA return?

TomD8

Employee

You file a CA return only. Your daughter files both a non-resident MA return and a CA return. Be sure your daughter indicates on her federal return that she can be claimed as a dependent by someone else. And be sure that she enters CA as her State of Residence in TurboTax.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

CA_1Author

Thank you so much for your reply.

Sorry that this is the first year my daughter goes to college out of state and I'm confused about how to do the tax return. Could you please clarify the following?

So we (parents and daughter) will have to file the following 5 tax returns:

1. Parents - Federal (claims daughter as a dependent, does NOT report daughter's income here?)

2. Parents - CA state (claims daughter as a dependent, does NOT report daughter's income here?)

3. Daughter - Federal (indicates parents claim her as a dependent, reports her scholarship and other income?)

4. Daughter - CA state Resident l (indicates parents claim her as a dependent, reports her scholarship and other income?)

5. Daughter - MA state non-resident (indicates parents claim her as a dependent, reports her scholarship and other income?)

Thank you!

TomD8

Employee

@CA_1 --

What you have is correct, but be aware of the following:

1. Your daughter's scholarship income may be only partially taxable, or even not taxable at all. Read this TurboTax help article:

https://turbotax.intuit.com/tax-tips/college-and-education/taxes-for-grads-do-scholarships-count-as-taxable-income/L2hWn0lpe

2. Your daughter is required to file in CA and MA only if her income exceeds each particular state's filing threshold. You can find the filing threshold amounts on each state's tax website. (But even if not required to file, she'd have to file in order to obtain a refund of any excess withheld taxes.)

3. If she does file in both MA and CA, be sure she completes the non-resident MA tax return first, before she does her resident CA return. That's because CA will grant her a credit for taxes paid to MA. The program needs the MA return done first, so that it "knows" the amount of the credit. (The credit is to avoid double taxation, which is prohibited by federal law.)

**Answers are correct to the best of my ability but do not constitute tax or legal advice.