Two Children in collegess in different states.

[Dannyapp]

Hi experts,

This is the situation.

We are currently living in NY and my two children go to colleges in Illinois and Massachusetts.

My son had a summer internship orientation for 2 weeks in NYC and finished the rest of his internship in Chicago for the last summer. 

He sent me his summer internship W2 today. It shows the employer's name and address in NYC (HQ is in NYC) and my son's name and address in his dormitory address in Chicago. 

Another W2 from the university for his work-study both employer and employee addresses are both Illinois.

Does he need to file in Illinois and NY tax returns?

My daughter also had a summer internship in NY and she also received two W2s from her internship and the university.

Summer internship W2 shows both employer and employee addresses as NY states.

W2 from her university shows the employer's address as Massachusetts and the employee's address as our NY home address.

Does she need to file in Massachusetts and NY tax returns?

also,

Can we still claim them as our dependents? They are full-time students and we are paying his tuition.

My son is going to work full-time in Chicago this year, but he possesses an NYS driver's license. Is he required to switch to IL DL to file his income tax next year? He planning to return to NY in 2 years...

[Vanessa A · Accepted solution]

Does he need to file in Illinois and NY tax returns?  Yes, he will need to file for both IL and NY.  He will need to file a nonresident return for IL because this is the physical location where he earned the money.  He will then have to file a resident return for NY because this is his permanent home state

Does she need to file in Massachusetts and NY tax returns?  No, since the internship was physically performed in NY, she would only need to file a NY return UNLESS she has a job while she away at college in MA.  

Can we still claim them as our dependents? They are full-time students and we are paying his tuition.  Probably.  As long as they meet the following criteria, you can claim them as dependents even if they are working while in school. 

The following criteria must be met to claim someone as a qualifying child:

• Your child (including adopted and foster children), your sibling, or a descendent of any of them.
• Age 18 or younger at the end of the tax year OR under 24 (and younger than you and your spouse) if they are a full-time student
• Lived with you for more than 6 months during the tax year, temporarily away at college counts as living with you
• They did not provide more than half of their own support
• They did not file a joint return, unless it was to claim a refund

Since they are over 17 you would be able to claim the $500 Non-Refundable Other Dependent Credit for each of them if they meet the above.  You may also be able to claim the American Opportunity Tax Credit or the Lifetime Learning Credit depending on type of education they are working on and how long they have been in school.

Is he required to switch to IL DL to file his income tax next year? He planning to return to NY in 2 years...If he is not becoming a resident of IL, then no, he would not need to switch his drivers license to file a return.  If he does become one, IL does require the DL or photo ID info to e-file your return.

Tax Benefits for Education

[Dannyapp]

Thank you so much for your detailed explanation!!!  Clearly understood.

One more question regarding my daughter's tax return.

She received W2 of $120 in income from her college in MA. Does she still need to file a tax in MA for that small amount? Someone said we don't need to do that under a certain amount...not sure.  but I will file a $7500 NY income tax for sure...

[ThomasM125 · Accepted solution]

Income of $120 is less than the minimum income necessary to file a tax return In Massachusetts for a non-resident, so she doesn't have to file a tax return there, but could file to get a refund if any tax was withheld. @Dannyapp