Newly Married Couple, Multiple States and Stipend/Free Tuition/Room and Board from a Foreign University

[Gpa2022]

I'm helping my son with his taxes, first time, and wanted to verify I'm filing in all the correct jurisdictions.  He is a California resident, and his wife is a Virginia resident.  He worked part of the year in New Jersey as a research assistant and is now earning income as a graduate student in Colorado.  His wife is receiving a graduate degree overseas and is receiving a small stipend, a waiver of tuition and free housing.  The school doesn't provide a 1098.  

My understanding is:  

1) As a couple, they file Federal Taxes jointly and her stipend and cost of her housing is taxable.  I don't think the tuition is.  

2) My son files state taxes in New Jersey, Colorado and California, receiving a credit in California for taxes paid in other states.

3) She will need to file taxes in VA.

Other questions:

1) Do they file Married filing jointly for the state returns or since they are not residents of each other's states, do they file as individuals?

2) Since she has income from another country, which Turbo Tax product would they use.

Thanks!

[Vanessa A · Accepted solution]

Since she is not paying tuition, there is no need for a 1098-T.  Also, to claim an education credit, the school has to be an eligible education institution. 

Yes, they can file jointly for federal and yes her stipend and housing is taxable.  Tuition is not taxable.

Yes, if your son earned money in NJ and CO and a resident of CA, the would file a Non Resident Return for NJ and CO and then file the CA return claiming a credit for taxes paid to NJ and CO on his CA return.  

Yes, if she is only temporarily away from VA, she will need to file a VA return as her resident state.  Your resident state will tax all income from all sources worldwide.  If you are being taxed on that income by another state you can often claim a credit for it, however since she is not being taxed by another US state, she cannot claim a credit for the taxes paid on her state return, but if she is paying taxes to the foreign government, she may be able to claim the credit on the US return.

No, they do not have to file jointly for the state returns since they were not residents of the other states.

You can use TurboTax Deluxe or higher.