college student summer job

[bzhang1998]

I live in California.  My son is a fulltime college student in Michigan.  He had a summer job in Seattle and earned 32,000.  I understand I can still claim him as dependent since i am paying for most of his cost, but he has to file his own tax, correct?  Since his work was in Seattle, does he need to file state tax in California or in Washington?  His Seattle W2 listed his school dorm address as the employee address, if that matters.

Thanks

Bin

[xmasbaby0]

If you are claiming your son as a dependent---which you can do if he is a full-time student under the age of 24---and you live in CA, then he is "temporarily absent" from home and is still a resident of CA for tax purposes. 

WA has no state income tax.   But CA does have a state income tax.  He will need to file a federal return and a CA return.   You have not mentioned whether he had a job in MI while there for school.    

MY DEPENDENT HAD A JOB

If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return.  He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return.  (Supervise this closely or prepare it for him!)

If your dependent’s earnings were over $400 and were reported on a 1099Misc or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare.

You might also want to use free software from the IRS Free File versions:

https://apps.irs.gov/app/freeFile/

(The MI address used by the employer on the W-2 is not important).   When your son prepares his tax return he should use the mailing address where he wants to receive a letter or a check from the IRS.

[bzhang1998]

Thanks for the answer.  Yes, I am claim him as a dependent in my returns.  He didn't work in Michigan where he goes to school.  And he didn't work in California.  Since he didn't have any income in California, he shouldn't owe any tax in his CA return, correct?  TurboTax is showing he owes tax in his CA return.

[xmasbaby0]

Yes---he will owe CA tax.   He worked and earned income---even though he worked in another state he has to pay tax to the state he lives in.  And as a student being claimed as your dependent---he "lives" in CA.   He paid no state tax in WA since there is no state tax in WA.  But he will have to pay CA.

[bzhang1998]

Ok, thanks.  I just noticed on his W2 it also listed under boxes 15, 16, 17 Michigan state wages, state income tax.  Box 16 has $7100, and box 17 has $280 state income tax.  Does this mean he has to file state tax in Michigan in addition to filing state tax in CA?

[xmasbaby0]

It seems that since the employer used that MI  dorm address, they withheld MI tax.   He will need to file a MI non-resident return and a CA resident return.

We may need some thoughts from the best of all at state tax issues---    @TomD8 ?

[TomD8]

I agree with @xmasbaby0's analysis.

He is a resident of CA for tax purposes.  Temporarily attending school in Michigan does not change that. Therefore ALL his income is taxable by CA, regardless of where earned.

Since he is a non-resident of Michigan with no Michigan-source income, he has no income tax obligation to the State of Michigan.  However, since MI taxes were mistakenly withheld from his pay, in order to obtain a refund he must file a non-resident MI tax return, on which he shows the withholding but declares zero Michigan income.

Washington State has no income tax, so there is nothing to file there.

In the My Info section of TurboTax, he should enter California as his State of Residence. He should indicate that he has other state income from Michigan, so that the program will generate the non-resident MI tax return.

[bzhang1998]

Thank you @TomD8 @xmasbaby0 for the responses. One question: since the W2 indicates MI state wages in box 16, and TurboTax is taking data from the W2, will I end up having to pay tax in  both MI and CA returns?  Do I need to manually change the W2 in Turbox to put 0 in the W2, box 16?  Or do I need to contact the employer to correct the W2?  If I manually tweak the box  16 will the box 17 also become zero (0)?  I just want to make sure it works before paying the extra for a second state return for TurboTax.

Here is a screenshot of the portion on his W2.

https://app.screencast.com/d6hZqChkkSBO7 

[xmasbaby0]

No.  As explained by Champ @TomD8 your son will not pay MI tax.   He will file a non-resident return for MI but indicate that NONE of the income was earned or received in MI.   MI will refund the tax withheld.  Your son will owe tax to CA.   He needs to prepare the NON-resident MI return first before he prepares the CA return.    Do not mess around and change anything that you see on the W-2.

[bzhang1998]

Thank you @xmasbaby0 and @TomD8 for all the help! I'm now all good.

Thanks again