Son went to school & works in MA, is being claimed as NC dependent

[user17712108350]

Hello Turbotax Team,

My son went to school in MA for 8 months of 2025. 

For the remaining 4 months he worked as an employee of a MA company. 
I paid greater than 50% of his QHEE expenses using 529 funds so i am claiming him as a NC dependent -- correct me if I am wrong in doing so. 

I file NC state taxes.

His employers are MA-based & withheld only MA state taxes. No earned income in NC for 2025.

He has been living in MA the full year of 2025 -- first as a student & now as an employee of a MA company. 

My questions are:
does he file a NC state tax return? -- which one -- Full Year resident or part-time resident?

does he have to pay NC state tax even tho' no earned income in NC?

does he file a MA state tax return? -- which one -- Full Year resident or part-time resident?

thank you for your help. Regards.

[Vanessa A]

How old was your son at the end of 2025?  How much did he earn in 2025? Did he live there in 2024?  Did he have a permanent home in MA?

 North Carolina follows the same rules for dependents as the IRS.  So if you cannot claim your son for federal purposes, you cannot claim him on your NC return.
 

If your son was 24 or older at the end of 25, he no longer qualifies as your  qualifying child, he could potentially be a Qualifying Relative, but if he earned more than $5,200, he would not be your qualifying relative either. 

As to whether or not he needs to file a NC return, that depends on when he established residency in MA (drivers license, got a permanent home/apartment, registered to vote, updated mailing address, etc).  If he did it as soon as he moved there and was moved in prior to 2025, then he would not need to file a NC return.  

If he did not establish residency in MA until he graduated, and did not have any income until he graduated, then he would not need to file a NC return because he wouldn't have taxable income during his NC residency time.

If he did not establish residency in MA until he started working, but he did have income for the rest of the year, if that income was greater than $12,750, he would need to file as a part year resident for NC and a non resident return for MA.  He would take a credit on the NC return for taxes paid to MA. 

Yes, he will need to file a MA return, but as to whether it is a full year or part year depends on when he established residency in MA.  If he moved there with the intention of being there permanently and found a permanent home, then he would file as a full year resident.  If he moved there, lived in temporary housing and then when he graduated moved into a permanent home, then he would be a part year resident. 
 

Multiple States—Where to File
 

[user17712108350]

thanks Vanessa A for your reply. let me answer your questions:

He was 24 at the end of 2025.

I do not have his W2 handy but I am going to guess, between 2 employers, he earned $50,000 in 2025.

He lived in MA from Aug - Dec 2024.

he does not have a permanent home in MA -- he is renting an apartment in MA.

My son has not established residency in MA as yet even tho' he is working for a MA employer -- NC DL, votes in NC, his day-day & packages go to his MA apartment address but the NC address is still his permanent address.

I hope this helps you to give me a more specific answer. Thanks & regards.

[Hal_Al]

You say your Son is being claimed as NC dependent. As the other reply said, the first thing we need to do is verify that you are allowed to that.  You probably can.  Almost all college age students continue to be their parent's dependent, even if attending  school out of state.

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
3. He lived with the parent (including temporary absences such as away at school) for more than half the year.  Staying over, for work, for the summer break, makes that a little less clear. But the general rule is, his primary purpose, for being there,  is still for school.  Depending on other details of his living conditions and his intent, he is probably considered as temporarily absent, from your home, and is still your dependent. 

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on himself.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants, even if he only comes home for short visits. 

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

So, if he is still your dependent, he files a non resident MA tax return, to pay tax on his MA  income.  He files a resident NC return, reporting all his income, including the MA wages. NC gives him a credit, or partial credit, for the tax paid to MA.  So, there is seldom any double taxation. 

[user17712108350]

Hi Hal_Al

thanks for your reply.
when my son was a student, I provided 100% of the support -- tuition, room & board.

I will take him as my dependent & do as you suggested in your final paragraph. 
thanks & regards.