Do I need to file in both NC and SC

[soccerdad1]

We live in NC and my daughter (an NC resident) is going to school in SC.  She made a small amount of money ($5K) in SC working at the school and they withheld about $90 in State taxes, and no Federal withholding.  Her total AGI is only ~$6k. Other income is from int and div.  No other income or deductions.  Do I have to file in NC and SC along with Fed just to get back the $90 SC state withholding?  By the time I buy the extra state in TT and pay for electronic filing for all of them, it will cost more than the $90 refund.  Can I just not file any taxes at all for her? Also, she is part of our ACA subsidy so I think I have to show her $6K AGI as part of our MAGI when we file.  Is that the case even if I decide not to file any taxes for her?

[MonikaK1]

Yes, your daughter would need to file a nonresident South Carolina tax return in order to claim a refund for state taxes withheld there.

Federal Tax filing requirements for dependent children are different from those of other taxpayers.

• A dependent child who has earned more than $15,750 of earned income (tax year 2025) typically needs to file a personal income tax form. Earned income includes wages, tips, salaries, and payment from self-employment.
• A dependent child who receives more than $1,350 in investment income in 2025 is required to file a tax return. Investment income includes interest and dividend payments.

See this TurboTax tips article for more information.

You only need to report a dependent's Modified Adjusted Gross Income (MAGI) for ACA premium tax credit purposes if that dependent is required to file their own tax return. If they file only to receive a refund of withheld taxes, their income is not included. 

See here for the South Carolina filing requirements.

[soccerdad1]

That is great information.  So I could have the option of not filing any taxes for her at all and just abandoning the $90 they withheld?  I assume if I want to file the SC return, I would also be forced to file a federal return and an NC return.  I think all of that would cost more than the $90 she would get back.  

[DianeW777]

The South Carolina (SC) filing requirement for nonresidents is as follows:

• SC FAQs --If you are a nonresident or part-year resident, you are generally required to file a South Carolina return if you work in South Carolina or are receiving income from rental property, businesses, or other investments in South Carolina. 
• Also see 'How to File'.

They do require filing whether or not a federal return is filed.

@soccerdad1