Son had college internship out of state, questions about filing taxes.

[Sandyjb555]

I have a couple questions here. My son did a 5 month college internship in New York City his junior year (2015).  He then came back to Athens, Ohio and worked at college the rest of the year. His main residence (home) is also in Ohio.

1. Is it safe to assume that he will need to file All of the following?

1 Federal Return

1 Ohio State Tax Return

1  New York State Tax Return

1 For city of main residence (where parents live) did not work back home.

1 For City of Manhattan where internship was

1 For City of Athens where he goes to college and has job there

2. I am confused when I read instructions for different city forms when it comes to whether he is a "resident"  or "part time resident" or NON resident. We have always considered him a full time resident in his hometown city thus far as he is still a student. But what about New York where he interned for 5 months?

I understand some of these questions are not really for turbotax or Federal, but I don't know where else to ask these questions. Thank you to anyone who can be of assistance.

[BarbL · Accepted solution]

A student who is away to attend school is still considered a resident of his home state/city for tax purposes.  He will be a non-resident everywhere else. 

In your situation, your son will file a Federal return, an Ohio Resident return, and a New York Non-Resident return.  His New York non-resident return will report only the income earned in New York.  The Ohio return will report ALL income, but provide an allowance for any tax paid to the state of New York.  (He will not be taxed on the same income twice.) 

When completing the state section of Turbo Tax, he must do the NY non-resident state before the OH resident state.  This will allow the credit to be calculated and applied to his Ohio return. 

For the city returns:

-The City of Athens requires a non-resident to file a return if they worked more than 12 days within the city, and the employer did not withhold 100% of the tax due.

-Check with your city, as he may not be required to file with them if he does not have any city-source income for 2015.

-Manhattan is part of New York City, and the NYC return is integrated into the NY state return.  He will file as a non-resident for both New York State and New York City using the same form. 

[Sandyjb555]

Thank you for your time and help!!

[zg1212]

"His New York non-resident return will report only the income earned in New York."

Do you mean he doesn't need to report his Ohio income on NY form 203? Instruction says federal column of line 1 on form 203 should equal the amount on the federal 1040.

Shouldn't  he report both his NY income and Ohio income in Federal column on page 1 of form 203, then on page 2, first total NY tax on his total income is calculated, then that amount is multiplied by factor (ratio) of NY income divided by total income to get his final NY tax?

Thanks.

[MaryK4]

Yes, he will report all his income (from the federal return) - this will determine his tax rate, which is then applied to the New York source income only.  @zg1212 

[zg1212]

Thanks @MaryK4 .

So the steps are:

1. On page 1 of form 203, report all income (both NY and non NY) in fed column, report NY income in NY column.

2. Carry over total fed income to page 2, and calculate tax using total fed income.

3. Multiply the tax in step 2 by the ratio of NY income over total fed income, to get final NY tax.

Are those correct?

If form 203 carries over NY income instead of fed income to page 2, and calculate directly NY tax (without the ratio step), the tax would be actually lower. And this would be truly "NY taxes nonresidents only on tax from NY sources".

But I was told this (step1 to 3) is how NY tax works anyway.

Thanks for your help.

[MaryK4]

Yes, you are correct with the ratio steps.  New York will get every possible tax dollar it can find! Thanks for the clarification. @zg1212 

[zg1212]

Thanks and appreciate your help! @MaryK4