topic Re: Multiple State filing in State tax filing

Multiple State filing

imboyd4 — Sat, 07 Mar 2020 03:02:50 GMT

My daughter lives in Michigan but is a full time student in North Carolina. She works at the school she is attending. She didn't earn any income in the state of Michigan. Does she need to file a tax return in both states?

Re: Multiple State filing

MaryK4 — Sat, 07 Mar 2020 03:17:54 GMT

Yes, unfortunately, she would have to file a North Carolina Nonresident return then a Michigan Resident tax return. She will get a credit for taxes paid to North Carolina.

Re: Multiple State filing

imboyd4 — Sat, 07 Mar 2020 16:54:50 GMT

Thanks. A follow up question:

She made under $2,300.00 for the year. Since this amount doesn't exceed her tax exemptions will she still need to file a state return in either state?

Re: Multiple State filing

KathrynG3 — Sat, 07 Mar 2020 17:19:38 GMT

It depends. I recommend filling out North Carolina, then Michigan if she had withholding.

First, presuming she had withholding in North Carolina, this will return her withholding.

Second, as a resident in Michigan, she is required to pay tax on all income. As a dependent claimed on your return, she must file in Michigan if her Adjusted Gross Income was more than $1,500. (see page 3 column 2, Who Must File a Return from the Michigan Instructions Book link below)

2019 MI-1040 Tax Book starting on page 10: your daughter still owes a state level tax on the income she earned. However, since North Carolina will refund the full amount, there is no offset. See page 14, column 1:

"Michigan residents cannot subtract salaries and wages or other compensation earned outside Michigan. However, they may be entitled to a tax credit for income tax imposed by government units outside Michigan (see page 10)."