topic Re: working in multiple states in State tax filing

working in multiple states

jillbink — Sat, 21 Mar 2020 15:02:49 GMT

My full-time student son worked in NJ and VA in 2019. He had NJ state taxes taken out of the NJ wages and VA state taxes taken out of the VA wages. Do I exclude the VA earnings from his NJ filing and file a VA state tax form to get back his VA state withholdings?

Re: working in multiple states

SteamTrain — Sat, 21 Mar 2020 15:33:32 GMT

No.....(assuming he is in VA as a nonresident student, and both he and you, as parent(s), are NJ residents).

AFTER the Federal tax forms have been prepared...every scrap error checked (but not filed)

1) First he(you) prepares the VA nonresident tax return. Since he worked in VA, VA is allowed to tax all that VA income. They may base the tax on his total income, but the actual tax should be chopped done on the forms based on the actual % of his total income earned in VA. He may get some of it refunded, or he may owe VA a bit more.

THEN

2) He prepares a NJ resident tax return, and NJ calculates a tax for him based on his total income from everywhere, but to avoid double taxation, the NJ forms then apply a tax credit for the taxes that he had to pay to VA (not what was withheld in VA...just the total they ended up keeping) .

3) Make sure you/he indicates he is claimed as a dependent in his My Info section (Personal Info if using Desktop software) if he was under age 24 during 2019 and he did not provide more than half of his own support. Try to file your own tax return before his to avoid complications if his dependency status is marked wrong.

4) Would be great if you worked with him on his taxes at the same time, together....far too many young folks are almost clueless when it comes to tax preparation....perhaps both of you learn some of the annoying details together?

Re: working in multiple states

KathrynG3 — Sat, 21 Mar 2020 15:41:23 GMT

No. @SteamTrain is correct.

See the resources below for more specifics to the rules and entering it in TurboTax:

How do I file a nonresident return?

The line by line instructions of the 2019 NJ-1040 Resident Booklet state that Line 15 for Wages includes all wages earned inside and outside of New Jersey.

Regarding income taxed by another jurisdiction, you are entitled to a credit for all taxes withheld from the other jurisdiction.

See Form 763 2019 Virginia Nonresident Income Tax Filing Instructions beginning with page 11: Nonresident definition

Re: working in multiple states

jillbink — Sat, 21 Mar 2020 15:44:22 GMT

thank you. I think I figured this out after I asked the question, and I basically came up with the same conclusion. I originally checked the VA earnings to be excluded from NJ but after many gyrations, I realized this isn't correct. Guess I now have to pay for an additional State tax in Turbo tax :(. Tried to see if I could file VA state taxes for free (not including federal filing) but couldn't figure that out either.

Re: working in multiple states

KathrynG3 — Sat, 21 Mar 2020 16:01:55 GMT

You're welcome! In reply to your next question, it depends. It would be best to have all state filings in one system but it is not imperative. Click the link to see the Virginia Individual Income Tax filing option directly with the state.