Student State Residency

[Tallkraut]

We live in PA. My daughter was a student in ID for the 2020 spring semester and had a part-time job (1st W2). In March she came home due to Covid shutdown and worked over the summer in PA (2nd W2). In August she moved to ID to establish residency (taking a gap year and then re-entering school as in-state) and is working full-time (3rd W2). 

1. Can I claim her as a dependent (I did provide more than half of her living expenses in 2020)?

2. What is her state of residency (PA or ID since she moved there in August)?

3. What state(s) does she need to file income taxes in? 

Thank you!

[MaryK4 · Accepted solution]

1. Yes you can claim her as a dependent if she was under 24 and a full-time student since she did not provide more than half of her own expenses and she lived with you more than six months during the year.

2. Her residency would be Part-Year Pennsylvania and Part-Year Idaho.

3.  She will have to file for PY PA (1st and 2nd W2) and Idaho (1st W2 as nonresident, 3rd W2 as resident)- prepare the ID return first because she can can claim a credit for the taxes paid on the 1st W2 as NR to ID.

[Hal_Al]

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.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
3. He lived with the parent (including temporary absences such as away at school) for more than half the year

If she does not qualify under the QC rules, she might still qualify under the Qualifying Relative (QR) rules.  The most relevant QR rule is that her income must be less than a mere $4300 for the whole year. That is unlikely if she had 3 W-2s.

So, to be a QC dependent, she must be considered as living with you.  That makes her a full year PA resident.  She would file a resident PA return and a non-resident ID return.  

How that might affect her claiming to be an ID resident for in-state tuition is not a tax question. So, beyond the scope of this forum.