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Residency for Students out-of-state

I've currently been in Florida attending college since Aug 2022. I'm from Indiana, that's where my parents are. They support me with food money, but grant money covers rent. I have an Indiana driver's license, and because of this I had to register to vote in Indiana. I never lived in Indiana in 2023, and I never worked in Indiana in 2023, but I have 3 W2s from Florida from working there in 2023. When doing my taxes, I put my residency state as Florida, because I lived there for more than half the year and I have bank accounts addressed to FL. When I put in IN for residency at first, it said I owed $600...but without using IN as residency state, I owed nothing (FL doesn't have income taxes.) However, my parents claimed me as a dependent on their taxes. My federal return was accepted still.  Did I do something wrong? I'm in FL for school but I do not plan on moving back to Indiana once I'm finished. I don't have a vehicle in FL either. My parents believe that I should've put my residency in IN, but I never lived there during the year... I feel my situation is complicated but I'm sure it's probably really simple. I would just like to make sure that I didn't input information incorrectly. 

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7 Replies
SusanY1
Expert Alumni

Residency for Students out-of-state

Based on the information you've provided, your tax residency is Florida.  

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maglib
Level 11

Residency for Students out-of-state

@morganigeis3  Indiana Rules on who is a Resident:

Full-Year Residents

You are a full-year Indiana resident if you maintain your legal residence in Indiana from January 1 through December 31. You do not have to be physically present in Indiana the entire year to be considered a full-year resident. Residents, including military personnel, who leave Indiana for a temporary stay are considered residents during their absence. For example, visiting your out-of-state relatives for a couple of weeks each year won't impact your Indiana residency status; you're still a full-year resident.

Full-year residents must file Form IT-40 for a Indiana Full-Year Resident Individual Income Tax Return.

If you are retired and spend the winter months in another state you may still be a full-year Indiana resident if:

  • You maintain your legal residence in Indiana and intend to return to Indiana during part of the taxable year;
  • You keep your Indiana driver's license; and/or
  • You keep your Indiana voting rights.

For example, Tom and Jane stay at their Florida condominium from Nov. 1 through March 1 each winter, and return to their Indiana home the rest of the year. Since they didn't take steps to become Florida residents (such as registering to vote in Florida, getting a Florida driver's license, etc.), they are full-year Indiana residents for income tax purposes.

Check out the IT-40 instruction booklet for more information.

 

Students away at school are normally considered residents of their parents abode and college is considered temporary until you have made a decision where you permanently live.  As you didn't change your voting or your DL, you did not take the needed steps to change residency.  you are in a grey area of residency unless you changed.  DId you vote in 2023?  If you mailed in a ballot or voted in IN, think of that decision.  Where are your financials?   Decision is yours based on what you know but, don't make the decision because no income tax in FL, make it based upon facts and circumstances.

 

 

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Hal_Al
Level 15

Residency for Students out-of-state

Q.. I feel my situation is complicated but I'm sure it's probably really simple?

A. It is.  You are an Indiana resident and as such must file an IN resident tax return. Almost all out of state students are still residents of the state they came from, particularly if still a dependent of their parents back in the old state. Nothing you described ( even "never lived there during the year") would alter that rule, in your case. 

 

You report all your income on your resident state return, including the income earned in the other state. Your home state calculates tax on all your income, but gives you a credit, or partial credit, for tax you paid to the other state.

When you worked in a state without an income tax (e.g. Florida), there will be no credit, since there was no TX tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state.

 

 

Residency for Students out-of-state

So should I submit another tax return for Indiana? 

I didn't submit one for IN, only for FL. 

Hal_Al
Level 15

Residency for Students out-of-state

Q. So should I submit another tax return for Indiana? 

A. Yes. You are an Indiana resident and as such must file an IN resident tax return.

 

Q. I didn't submit one for IN, only for FL. 

A. FL does not have a state income tax. So, I don't know what you think you filed?

Residency for Students out-of-state

I just meant that I only submitted my tax return under FL residency, so no state return for FL. 

 

 

Residency for Students out-of-state

How is my tax residency determined to be in FL?

Many other users under this post stated that my residency was in IN so I should submit a state IN return...do you concur with this or what else do you think?

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