My FT college student son is claimed as a dependent. His state of residence is Alabama but last summer he interned in Chicago for 2 months and earned W-2 wages. I am really confused on how to read his W-2 and confirm his residency status. His W-2 is 2 pages and has one for AL that includes his federal wages and AL state income taxes and a second page for IL with no federal wages but IL state wages and income taxes.
Turbo Tax is trying to get me to confirm part-time residency in Illinois which is throwing off his AL return and creating double taxed income. Is that normal? Should I only report his residency is Alabama?
THX!
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He is an Alabama resident and an Illinois nonresident. Check the entry at the start of each state to verify the correct status. He will have to report the income and pay the tax in Illinois. He will also have to report the income to Alabama, but the credit for taxes paid to other jurisdiction apply to eliminate or reduce the taxes due to Alabama.
Correct...as he is your dependent, only list his residency as Alabama for the entire year.
His time in Illinois is considered as being there just temporarily...and he did not "Move" there.
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Similarly...Thousands of students work in National parks every year over the summer, in other states. They are not considered to have "moved" to those states...and are only working there as non-residents.
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And...PLEASE, get him to work on those taxes, while looking over your shoulder....every year until he is out on his own.
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