My child resides in NJ (I claim them as a dependent and I live in NJ). They attend a college in NY full time.
Their income on their W2 (from a job in the summer) was $5665 (no federal or state tax withholdings). They received scholarships that covered all of their tuition and also covered their room and board, which was $7990. On the 1098-T, Box 5 - Box 1 equals $9557. They have $814 in "other educational expenses".
My questions are:
- Do they need to file a federal tax return if the amount is under the federal standard deduction?
- Do they need to file a NJ state tax return?
- Since I don't receive an education credit for them, would it make more sense for them to file separately (as a non-dependent)? Is seems like we would save around $250, if I removed them as a dependent and they filed separately. I just don't understand the implications of doing that (are they now a resident of NY, do they have to pay NY tax AND NJ tax then?)
Thanks!
