I am currently in a paid internship in MD, but would like to keep my status as an IN resident for applying to graduate school. Do I need to file taxes for both states?

[leerj]

I am currently working in a temporary paid postbac research internship in Maryland, but want to maintain my Indiana resident status for applying to an Indiana graduate school (preference is give to in-state applicants).  I received a 1099-G form from the internship with my temporary Maryland address as the address on file.  Do I need to file taxes for Maryland as well as Indiana? And how would I go about doing this?

[KristinaK · Accepted solution]

Yes, you need to file two tax returns. If you haven't officially changed your residency from Indiana to Maryland (obtained MD driver's license, registered to vote in MD, etc.), then for tax purposes you are considered a resident of IN and a nonresident for MD.

If you have income in your nonresident state (MD), you will need to file a nonresident return showing income sourced in MD. In TurboTax ALWAYS start the preparation of your state tax returns with a nonresident return. Then, since you are still a resident of IN, you have to file an IN resident return and report income from ALL sources on that return.

TurboTax will calculate taxes paid in MD as a credit for other state taxes paid on your IN return and will reduce your IN tax liability, if any. That's why it's important to start preparation of state tax returns with a nonresident return.

[leerj]

Thank you very much for your help.  Even though my 1099-G form states my temporary Maryland address as my address, can I still be considered a nonresident for Maryland?  And which address should I list as my address on my federal tax returns?  How would I input this on TurboTax?

[KristinaK]

Yes, even if you have tax forms with your temporary MD address, you are still a nonresident if you did not change your residency from IN to MD. You would want to list your resident (IN) address on the federal return. And the input for address happens under Personal Info section. The software will ask you for name, address, SSN, etc.