I have the nurse corp scholarship. I live in Louisiana, but the W2 days Maryland. Why do I owe so much state taxes?

[zbug02]

Nurse Corps scholarship does not withhold state and local taxes. I understand that. The W2 reflects tuition, stipend, and other related costs paid in my name. I have a 1098T to reduce the tuition payments paid directly to the school. However, Louisiana is collecting taxes on the total amount listed on the W2. I don't understand. I should not have to pay $2300 in state taxes.

[KrisD15]

If listed on Form W-2, it will be treated as taxable compensation. 

If you are a Louisiana resident, you are tax on all your income, no matter where earned. 

If the W-2 was earned in Maryland, you would also file a Maryland return, but if the W-2 was only issued by a Maryland payer, but earned in Louisiana, only file for Louisiana. 

Scholarships used for education expenses are non-taxed but if paid for services and reported on a W-2, it is taxable compensation. 

Please see the HRSA website for how the scholarship is considered taxable. 

[Hal_Al]

Statement (S). "However, Louisiana is collecting taxes on the total amount listed on the W2."

Comment (C). That is correct.  The box 1 amount on the W-2  is totally taxable, by federal and state. There are no deductions allowed.

(S). "I should not have to pay $2300 in state taxes."

(C).  That does seem high, depending on how much is in box 1 of the W-2. There's probably something else wrong. 

(S).  "I have a 1098T to reduce the tuition payments paid directly to the school."

(C). That doesn't make sense.  You may be allowed to claim a federal tuition credit of up to $2500, depending on what's in boxes 1 and 5 on the 1098-T.  But that won't help you on the state return.