My dependent 21 year old child is a full time student in IL, yet a resident of MI. She has a part time job in IL and earned $14000. Does she need to file both an IL(non-resident) AND a MI(resident) return? Is there a way to reduce the large amount of tax she apparently owes to MI?
In general, nonresidents are taxed on income earned in that state and residents are taxed on all income regardless of where it was earned. To avoid the double taxation of the same income, most resident states will give a credit for the tax paid to the nonresident state.