State Resident for My Daughter

[ChicagoJ]

Hello!  I want to make sure I am doing this correctly for my daughter's taxes.  She is 18 years old, and we live in Illinois.  My daughter had a job in Minnesota for the summer (May 25-August 5).  How do I enter this in TurboTax?

-She did live in MN during the 2 1/2 month she was there, but is that "enough" to declare partial MN residency?

-If I select, "I had more than one state residence in 2024," it asks me to select when my daughter left IL and went to MN.  It doesn't allow me to place dates for her "coming back" to IL in August, which makes me think that I am supposed to say my daughter was a full-time resident of Illinois.

-If I do say she is full time Illinois, she has to pay a large (for her) Illinois tax.  When I select "part time IL, part time MN," she has a credit on the Illinois tax.

How do I square this away for her?  I want to her max her return and minimize any state payments.  Do I need to submit multiple returns for IL and MN??  Any assistance you can provide is appreciated.  Thank!

[MaryK4]

No, your daughter is not a Minnesota resident.  In general, you do not become a resident of a new state when you are there for a temporary time. (and she also needs the intention of not going back to her residential state).  

She will file a resident Illinois and a nonresident Minnesota.  She will be able to claim the credit for taxes paid to another jurisdiction on her RESIDENT return (which is why the part year resident designation you selected makes a difference.)  

See Who is an Illinois resident? (This may be helpful for when she goes to college if she goes out of state!)

If you have any other questions, please ask!

[ChicagoJ]

Thank you so much for your response!  Here's my dumb follow-up question:  Do I have to file a Minnesota state tax return (MN is the state she lived and worked in "temporarily" over the summer) or is filing the Illinois State tax return enough?

When I changed my answers in TurboTax to "full time resident in IL, but earned money in a different state," the Illinois tax due was reduced from $240 down to $40 or so.  I assume that's because IL has a higher state tax rate.  In any case, I'm fine with just filing the IL state tax return (along with Fed, of course!) and paying the $40 and calling it a day.  TurboTax charges me $45 to do MN as well and I'm wondering if I can just save this expense.  Of course, if I do NEED to file both IL and MN, I will do so!!  Thanks in advance, @MaryK4 !!

[DianeW777]

It depends. If she does not meet the filing requirements for Minnesota (MN) she is not required to file as a nonresident.

• MN Filing Requirements
  • $14,575 - Single 

If her income is below the filing requirement she could file MN for a full refund. She is not required to do that.

Who must file an Illinois tax return?  If you were

• an Illinois resident, you must file Form IL-1040 if
  • you were required to file a federal income tax return, or
  • you were not required to file a federal income tax return, but your Illinois base income from Line 9 is greater than your Illinois exemption allowance of $2,775 for 2024.

@ChicagoJ