Military Child Dependent Residency and Non-Resident State Taxes

[yancey-david]

My son is filling his first tax return this year and I will claim him as a dependent.  I am active duty military and was stationed in both Hawaii and California in 2015, but retain Texas residency.  He worked from August through the end of the year in CA.  How do I ensure his CA taxes are filed correctly, but retain his Texas residency?

[BarbL · Accepted solution]

A minor's domicile follows that of the parent or guardian who has lawful custody of the child.  Because you are only in California due to military orders, and he is here due to those orders, he is still considered a Texas resident.  He will file a California non-resident return to report the income earned while in the state.

If his income was $4,044 or less, he may not be required to file a state return unless tax was withheld from his pay. In that case, he can file for a refund of tax withheld.

[stonea]

What applicable regulation, law, or policy substantiates the above recommended answer?  IRS code?  USC?  State Code?  Please advise and thank you.

[CalCountry]

@stonea, I agree with @TurboTaxBarb's answer.
The issue can be clarified by testing whether the dependent is, or is not, a California resident.  In the case at hand, it would seem the dependent is in California only for the temporary purpose of accompanying the military parent on PCS assignment.

See the following information from California FTB Publication 1031 at:
   <a rel="nofollow" target="_blank" href="https://www.ftb.ca.gov/forms/2018/18_1031.pdf">https://www.ftb.ca.gov/forms/2018/18_1031.pdf</a>

"A California resident is any individual who meets any of the following:
 • Present in California for other than a temporary or transitory purpose.
 • Domiciled in California, but located outside California for a temporary or transitory purpose. ?Domicile is defined for tax purposes as the place where you voluntarily establish yourself and family, not merely for a special or limited purpose, but with a present intention of making it your true, fixed, permanent home and principal establishment. It is the place where, whenever you are absent, you intend to return.

A nonresident is any individual who is not a California resident.

A part-year resident is any individual who is a California resident for part of the year and a nonresident for part of the year."

[lane_askew]

Turns out @TurboTaxBarb's answer does not apply to Virginia.  I called 804.367.8031 on 18 March 2020 and discussed/validated the info at https://www.tax.virginia.gov/military-tax-tips applies to children with the words, "dependents living in Virginia are subject to the same residency and filing requirements as all other individuals." 

[dotnroy]

Could you please provide reference or citation? Thanks

[FangxiaL]

The 4th paragraph below should make it clear that minor children have the domicile of their parents.

Domicile and Legal Residency. 

@dotnroy