Incorrect Address and State Taxes

[mlsully67]

My son lived in IN attending college and earned wages in the county of his school.  For that W-2, they used his home address (also in IN) and took out IN state and county taxes of his home address.  I believe this is correct. What's confusing is that IN asks you the county you lived and worked in so I am not sure if I put the home county for both?  I don't think he would owe taxes in the county of his college where he worked. 

After graduating in May, 2024 he moved to IL and began working in the fall.  The new employer in IL had his IN address on file so they took out IN state tax (no county or local taxes) instead of IL.  It appears that we will need to file partial year residence forms for both states, get credit from IN taxes and owe IL?  

[AmyC]

It depends. Let's start with residency:

Your son lived in IN but if he was your dependent, your address is his permanent home while in school. If you also live in IN, then part year is correct. His driver's license, voting, and car tag tell his story. He may not be a dependent.

For IN 

• tax can be based on where you work and /or where you live. See DOR: Individual Income County Tax Rates by Year. Each location has its own rules.
• Nonresident or part- year resident

For IL

• Has he established his new home or is this a job that may not pan out, or transitional. Did he get the new license, rent a place to live and establishing new social connections?
• Nonresident passing through, unsure if staying or part-year resident.

If he is filing 2 part year returns, then only the income associated with that state is reported. IN will give a refund of the over withholding and IL will need to be paid.