Yes,
your son will file as a Maryland Resident (since he was only away for school, he keeps his Maryland Residency) but will also file a Non-resident South Carolina return to pay the tax on the income he earned in South Carolina.
No, you only enter one Federal Return and you enter all his tax documents on that one Federal Return. Indicate that Maryland is his resident state and "Yes, he earned income in another state". Indicate South Carolina as that other state.
Next, do the non-resident South Carolina Tax return and allocate the South Carolina income to that return. He will pay South Carolina tax on that income.
Finally, do his resident Maryland return and claim all his income. He will be taxed on all the income, however he will also get a credit for the tax paid to South Carolina so that he is not double-taxed.
Yes, the TurboTax program is smart enough to calculate the tax.
If he has a 1098-T that is eligible for an education credit (Box 1 on the 1098-T tuition paid is larger than Box 5 scholarships received) and he is your dependent, YOU enter the 1098-T on YOOUR return to get the credit. If there is tax due (Box 1 on the 1098-T tuition paid is less than Box 5 scholarships receive) HE enters the 1098-T and claims that taxable income.
I am unsure what an additional state return costs, you might post that as a different question as a product question. We answer mostly tax questions
I GUESS it is $40.00 but unsure.
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