Grad school research assitant's w2

Forum|Forum|2 years ago
March 16, 2024
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Someone received a w-2 from a grad school as a research assistant.

The w-2 withheld fed and home state tax(a different state from school's state) but no social security tax withheld. What's the difference between this kind of w-2 and regular w-2?

Thank you.

Opus 17

Level 15

Generally speaking, when a student is working for their school, they are exempt from social security and medicare withholding. The income is considered a student stipend rather than compensation for work performed.

Also generally speaking, you are required to file a state tax return in the state where your permanent residence is located, that reports and pays tax on all your world-wide income, even if you earn income while temporarily working in another state. Depending on the rules of the specific state, you may also be required to file a state tax return in the state where you are living temporarily, and pay income tax only on income earned in that state. Since your home state also taxes you on the same income, it will give you a credit to offset taxes paid to the state where your school is located.

Of course, if your income is less than the filing threshold, you may not be required to file at all. What state is your permanent residence located, where is your school, and what is your total income for the year?

magicstar41000-yAuthor

Level 4

Opus 17,

Thank you very much for your explanation.

The school is in PA. Income withheld on the w2 is reported to MA. Total income level requires to file tax return, but don't need to file tax return for PA?

Thank you!

Opus 17

Level 15

@magicstar41000-y wrote:

Opus 17,

Thank you very much for your explanation.

The school is in PA. Income withheld on the w2 is reported to MA. Total income level requires to file tax return, but don't need to file tax return for PA?

Thank you!

If Massachusetts is your home state, you file a resident MA return and report this income along with any other income you have. (If your income is below the filing threshold for MA, you may not be required to file at all, but you would need to file to get a refund of the withheld taxes.)

Here is the page that discusses PA residency.

https://www.revenue.pa.gov/formsandpublications/papersonalincometaxguide/pages/brief-overview-filing-requirements.aspx

You are probably domiciled in MA, and your abode in PA is not permanent, so you are not a statutory resident. Therefore you are a non-resident of PA. You are required to file a non-resident return no matter how small your income is, even if you owe no tax. On your PA non-resident return, you only report your PA-source income, and not income from other states.

In Turbotax, you would prepare the PA non-resident return first, then the MA resident return. That way, any PA state you owe (if you owe it) will be applied as a credit to your MA return.

Because you need to file a federal and 2 state returns, you might not be able to use the free version of Turbotax, even though your income is small. If you find that you are being asked to pay, you may want to look into other software providers through the IRS FreeFile program.