Student Working in Florida Full Year But From New Jersey

[Stevenbirn]

Hello, I live in New Jersey and my son has been in school in Florida for a full year and working part-time.  He gave his employer his Florida address.  Does he need to file a New Jersey tax return?  If so does he need to change the address with his employer so they take out NJ taxes like state, UI, FLI, etc.?  Thank you

[Bsch4477]

From the information you posted he does not have to pay NJ income tax and of course Florida has no state tax. 

[Stevenbirn]

Thank you for your reply.  Isn't he still a New Jersey resident since he is a dependent on my tax return?  Would that change your reply? 

[Bsch4477]

Edit ed. 

@Hal_Al is correct (as usual). As a dependent he is considered a NJ resident and pays tax on income made anywhere. 

[Hal_Al · Accepted solution]

Q.  Isn't he still a New Jersey resident since he is a dependent on my tax return?  Would that change the answer?

A. Yes.

Rule #1: out of state  college students usually have to pay income tax to their home state. 

He appears to still be a NJ resident. He must file a NJ resident return and pay NJ tax on that out of state income.  

The general rule is: you report all your income on your resident state return, including the income earned in the other state. Your home state calculates tax on all your income, but gives you a credit, or partial credit, for tax you paid to the other state.

When you worked in a state without an income tax (e.g. Florida), there will be no credit, since there was no FL tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state.

When away at college, students are considered to still  be residents of their home state.  The fact that he was away for a full year (did not return home for school breaks) might be cause for reviewing his residency status. But, the fact that you claim him as a dependent means that he is still a NJ resident.

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.

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

It's unlikely that you could claim him as a dependent under the qualifying relative rules if he "worked a full year" (his income would be too high). So, he must be considered as still living with you, to be a qualifying child dependent,  and therefore is a NJ resident. 

So, the conclusion, here, might be that  you and he have to choose between him not paying NJ tax or him being your dependent. But, it's not clear, in your case,  whether that's really optional (has he permanently moved out of your home?).

See full dependent rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...

[Stevenbirn]

Thank you very much for your reply.  He is 24 and was in school for 5 months this year.  He will be doing internships and then returning to school next May.  He will not earn more than $3000 and will be staying in Florida for the remainder of 2025.  From what I read if I provide support, in school at least 5 months, and he earns less than $5200 in 2025 I can claim him as a qualifying relative.  If I do not claim him I do not know if he is eligible to be a Florida resident, seems like they have strict requirements.  Do you think I am able to not claim him and he does not pay NJ taxes?  If so I would have to see which way works out better financially.  His job has been using his Florida address and withholding taxes accordingly so if I file in NJ for him he will have to pay UI/DI/FLI as well.  Thank  you very much again for your advice.

[Hal_Al]

Q.  Do you think I am able to not claim him and he does not pay NJ taxes?

A. At age 24, he can no longer be a Qualifying Child.  So, you no longer have to make that choice.  Yo can do both. You can claim him as a Qualifying relative dependent, regardless of whether he files a NJ return. You can only claim him under the qualifying relative (QR) rules.  It that case, for being a dependent,  it doesn't matter where he lives.   If you provide more than half his support, for the year (the 5 month rule is irrelevant), and he has less than $5200 income, you can claim him as a qualifying relative.

For whether he has to file a NJ return, it doesn't matter if you claim him as a dependent.  It only matters where he is a resident. Based on the fact that he has made  no effort to become a FL resident (get a FL drivers license etc), he is most likely still a NJ resident and needs to file a NJ resident return.  But there may still be time to change that.  On the other hand, the state tax on $2000 (after exemption) doesn't sound like enough to jump through hoops for (and probably doesn't even meet the filing requirement).

https://www.nj.gov/treasury/taxation/njit23.shtml

Q. So if I file in NJ for him,  will he have to pay UI/DI/FLI as well?

A. I'm not very familiar with NJ rules, but it appears that only the NJ employer is responsible for collecting those taxes and there is nowhere on the NJ form for the employee to pay them, if the employer fails to pay.  Furthermore, I doubt that it applies in the case of out of state employers. 

[Stevenbirn]

Thank you very much for your responses, they are extremely helpful.

[Hal_Al]

Answer above was edited to include: At less than $3000 income, he may not even need to file.

Again, I'm not familiar with NJ rules, but found this:

https://www.nj.gov/treasury/taxation/njit23.shtml