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Do I need to buy another state for a college scholarship earned in that state?

College daughter had part-time job in our home state. No state taxes withheld and she doesn't owe nor will she get a refund because her earnings weren't enough; she doesn't have to file a state income tax return in our home state. Because that's the state I used for my own return (same family, same household), that's the state already pre-filled when she tries to do her TurboTax state return. She attended college in another state in Fall of 2019 and had a very brief part-time job (2 months) as well as a federal work study in that state but made barely over $1,000 between the two. She also received a college scholarship to that out-of-state school but it was primarily used for tuition, books and necessary school supplies. Do I have to purchase another state download @ $45 just to "see" if she owes state income tax in that other state? I never thought about TT coming with "one free state" as meaning only one free state *per CD purchased*...I guess I figured each person in our household who uses it can file one state return...not necessarily all the same state. Good thing she switched schools and is attending an in-state university so this isn't an issue again for 2020 taxes! Just wondering if I have to purchase the other state just to find out if she even needs to file a tax return in that state. She never received a W-2 from that company, just realized it tonight, and cannot reach anyone from the payroll department until 10/16 anyway, so she'll already be a day late. She filed her federal with her other W-2s (getting 100% of taxes refunded) and will just file an amendment to that once we get the missing W-2 information. Lesson learned by daughter, but parents left with questions. Sounds like a big waste of $45 if she ends up not having to file a return in that state at all, but she cannot enter the numbers without buying that state download? 

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1 Reply
Hal_Al
Level 15

Do I need to buy another state for a college scholarship earned in that state?

Simple answer: you do not need to purchase 2nd state software for that situation. More accurately, you probably don't need to.

 

State filing requirement rules vary and it depends on what state she worked in and what is your home  state (reciprocal rules may apply). $1000 will be below most states filing requirements. But most states have a total income filing requirement. So, her home state income would also need to be known.  

Another issue: if the company didn't issue her a W-2, they may be treating her as a contractor.  Meaning, she may have to file as a self employed person (federal Schedule C).

 

See state filing requirements at: https://ttlc.intuit.com/community/filing-and-paying-taxes/help/do-i-need-to-file-a-state-return/00/2...

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