Graduate School Student & Multiple States

[robbs]

I have a child (no longer a dependent to me) from Illinois that attended a grad. school in Maryland since August of 2018.  She graduated in May of 2020 and was unemployed until she started a full time job in late July of 2020.  She started paying rent on an apartment in Washington DC on July 1, 2020, but did not move in until July 14th when her Maryland grad school's apartment contact ended.  I am planning on filing her state taxes as a full time resident for Illinois and then as a non-resident for Maryland and Washington DC.  The basis is that she was a student / unemployed for over 183 days, lived in her DC apartment for 170 days, and she has not changed her residency from Illinois (still has an Illinois driver license) to Washington DC.  Is this correct?

[Hal_Al]

 Is this correct?

No. 

She files  a part resident return for both IL and DC.  Effective date July 1.  She can ignore MD as  she is considered temporarily away from home, while a student. 

[robbs]

Thank you for your answer.  I forgot to mention that she had a job as a TA during her graduate school years at Maryland and earned some $$.  That is why I was thinking of submitting a Maryland's non-resident state return.  Would that bit of information adjust your answer of ignoring MD state return?

Thanks again

[Hal_Al]

Yes, since she had MD source income, she probably has to file a non resident  return.  I'm not specifically familiar with MD filing requirement. See:  

https://ttlc.intuit.com/questions/2903200-do-i-need-to-file-a-state-return

[robbs]

In completing the part-time resident for DC, should I state the income that she received outside of DC for "Subtractions From Federal Income, Part-year" section of the DC tax form?  Also, should I complete the "Summary of Taxes Paid to Other States" for the income earned while at Maryland's graduate school in the 'Taxes & Adjustments' section as a "Double-Taxed Income" & "Tax Paid to Maryland on Double-Taxed Income"?  Just a little confused as Tubo-Tax did not pre-fill in these boxes, so I don't know if I should complete none, one, or both sections. 

[DaveF1006]

First of all, you will complete the Maryland non-resident return first so that credits paid to the State of Maryland will be reported in your Washington DC resident return. in order for the flow to be entered correctly, you will need to allocate income between Maryland and DC.

• To report Maryland income, select state in the left pane of your return. Start with the questions and continue until you reach the screen that says Maryland Wage income. Here you will record the Maryland Wage Information. in this page, there is a special instruction for a DC resident that states in part,
• For the District of Columbia, Pennsylvania or Virginia residents: If you did not maintain a place of abode in Maryland for more than six months (183 days or more) of 2020, you are exempt from Maryland tax on your Maryland wage and salary income. Enter 0 (zero) as your Wages From Maryland Sources, even if you earned the income from services performed in Maryland. If you did maintain a place of abode in Maryland for more than six months (183 days or more), you are a statutory resident. You may need to file a Resident Maryland income tax return.
• Therefore, depending on how long she lived in Maryland going to school, she can either be exempt or she may need to file as a resident. 
• A next screen may appear that allows her to allocate all Non-Maryland income. This excludes income from Maryland taxation.
• At the end, there will be an income tax levied only on her Maryland return.
• Now you can start preparing your DC return.  DC will tax on all income but you should receive a credit for taxes paid to Maryland. You shouldn't need to do anything in your return Maryland return first.
• Reciprocal agreements only apply if you live in one state but work in another.