In NC for school, worked in Texas over the summer. Where to claim?

[mshinnenkamp]

More specifically, while doing my NC state tax return, I am asked if the wages on my W-2 were earned while:

1. NC Resident Income

2. NR NC Source Income

3. PY NC Source Income

4. Not NC Source Income

My question: Since I was living in Texas over the summer the entire time I earned the paychecks, can I claim that it was 'Not NC Source Income'? As Texas doesn't have state tax, this would save me money. (Note: the W-2 I received has NC listed as the only state on it) 

[DavidS127 · Accepted solution]

If you have a home in Texas (or any other state) and are only living in North Carolina to attend school, you are not a resident of NC.  In that case, as long as you don't earn any income working in NC, you are a Texas (or other state where your home is) resident and don't report the money earned in Texas as NC source income.

If all that is true, you normally would not need to file a NC tax return.  But, you'll need to file a NC nonresident return if you want a refund of the taxes withheld and paid to NC.  In that case, on the nonresident return the W-1 is "not NC source income".

If for some reason you are living in NC as a resident (more than 183 days and you don't have a permanent home in another state) you are a NC resident and it is NC resident income even though you were temporarily away in Texas when you earned it.