Graduate student and residency for tax purposes

[JHUstu]

My child was a graduate student in Maryland and turned 24 last year so she files as independent this year. We lived in California and then moved to NJ last year. My daughter got a Maryland drivers license, voted in Maryland  and registered her car with her Maryland off campus address in 2019 and also claimed part time resident in Maryland for part of 2019 but had no income in 2019 in Maryland. 

In 2020, she worked part time and made a small amount of income.  She graduates in 2021, and doesnt intent to remain in Maryland.

Does she file as California/NJ resident like us since she was a full time student, or does she file as a Maryland resident since she had a Maryland drivers license and voted there?

[MaryK4]

Since your daughter is not your dependent this year, she should file as a Maryland resident.  Even though she does not intend to stay in Maryland, by registering to vote and getting her driver's license changed, she took steps to establish domicile in Maryland.  Once you have domicile, you must intend to abandon it AND also take steps to establish a new domicile to establish state residency.

NOTE: The test looks at all the facts and circumstances and often, like in this case, there are bases either way- however, since she was not your dependent, it would be more difficult to show she made the move with you to New Jersey.  

[Hal_Al]

In addition to everything MaryK1101 said, there's the fact that her CA domicile no loner exists. The fact that she is no longer your dependent, weakens the possibility of her claiming your NJ home as hers. 

I agree, she should file a MD resident return.

[JHUstu]

Is there anyway to show dependency if we still provided more than 50% of her support? She only made $5000 last year which is not enough to support her self with tuition and room and board, but since she turned 24 she has to be claimed as an independent? 

[Hal_Al]

Q. Is there anyway to show dependency if we still provided more than 50% of her support?

A. No, not in your case. 

Turning 24 does not automatically make her a non-dependent. It just changes the rules. There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test. Only a QC qualifies a taxpayer for the Earned Income Credit. 

At 24, she can no longer be a QC. So, then we look at the Qualifying Relative rules. 

A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:

1. Closely Related OR live with the taxpayer ALL year
2. His/her gross taxable income for the year must be less than $4300 (2020).
3. The taxpayer must have provided more than 1/2 his support

In either case:

4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer

So, her mere $5000 of income (more than $4300) disqualifies her as a dependent.