College students, living out of state questions

Discussion in 'Tax' started by Melissa, Feb 10, 2004.

  1. Melissa

    Melissa Guest

    We have 2 son's attending college in Kentucky. They live
    there, and work there. Our home state is Ohio.

    We were able to claim them on our Federal Return for 2003
    because of they were full-time students.

    So, since they work in Kentucky, who do we file their State
    returns with? They made about $6,000 and $9,000 each on
    their part-time jobs.

    In Ohio, even if someone else can claim you on the Federal
    Forms, you can file and claim yourself as well on the State
    Return. I don't know if all the States are the same in that
    regard.

    Advice or suggestions on where to get help is appreciated.

    Melissa

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    Melissa, Feb 10, 2004
    #1
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  2. "Melissa" <> wrote:

    > We have 2 son's attending college in Kentucky. They live
    > there, and work there. Our home state is Ohio.
    >
    > We were able to claim them on our Federal Return for 2003
    > because of they were full-time students.
    >
    > So, since they work in Kentucky, who do we file their State
    > returns with? They made about $6,000 and $9,000 each on
    > their part-time jobs.
    >
    > In Ohio, even if someone else can claim you on the Federal
    > Forms, you can file and claim yourself as well on the State
    > Return. I don't know if all the States are the same in that
    > regard.
    >
    > Advice or suggestions on where to get help is appreciated.


    I don't know if Kentucky will allow your sons to claim an
    exemption for themselves, but since they earned income in
    Kentucky, they must file a Kentucky return.

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    Kerry Nichols, Feb 11, 2004
    #2
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  3. > We have 2 son's attending college in Kentucky. They live
    > there, and work there. Our home state is Ohio.


    Their home state is also Ohio unless they have taken steps
    to become KY residents (drivers licenses, voting, paying KY
    income tax, etc.). College students are considered to be
    temporarily away from home and retain their original
    residence.

    > We were able to claim them on our Federal Return for 2003
    > because of they were full-time students.
    >
    > So, since they work in Kentucky, who do we file their State
    > returns with? They made about $6,000 and $9,000 each on
    > their part-time jobs.


    OH and KY are reciprocal states so KY employers should
    withhold Ohio tax. If they withheld KY tax, they will have
    to file KY non-resident returns to get the money back and
    file OH returns to pay the OH tax. They may be delinquent
    in Ohio because they had no withholding.

    All freely provided advice guarantee correct or double your
    money back

    Frank S. Duke, Jr. CPA
    Cincinnati, OH USA

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    Frank S. Duke, Jr., Feb 11, 2004
    #3
  4. Melissa

    Katie Jaques Guest

    "Melissa" <> wrote:

    > We have 2 son's attending college in Kentucky. They live
    > there, and work there. Our home state is Ohio.
    >
    > We were able to claim them on our Federal Return for 2003
    > because of they were full-time students.
    >
    > So, since they work in Kentucky, who do we file their State
    > returns with? They made about $6,000 and $9,000 each on
    > their part-time jobs.
    >
    > In Ohio, even if someone else can claim you on the Federal
    > Forms, you can file and claim yourself as well on the State
    > Return. I don't know if all the States are the same in that
    > regard.
    >
    > Advice or suggestions on where to get help is appreciated.


    I would suggest you get professional help with your sons'
    state taxes this year. There are several complex issues and
    it is impossible to answer your questions without access to
    all of the facts.

    Ohio defines a resident for tax purposes to include all
    persons domiciled in the state. If your sons are in
    Kentucky only for the purpose of attending college, and do
    not intend to establish permanent homes there, then they are
    probably still Ohio residents for tax purposes.

    Kentucky defines a resident to include persons domiciled in
    the state, and also any person who spends more than 183 days
    of the taxable year and maintains a place of abode in the
    state. It may make a difference whether your sons maintain
    living accommodations in Kentucky when school is not in
    session, e.g. during the summer. It is entirely possible
    for your sons to be tax residents of both Ohio and Kentucky
    at the same time.

    There is a reciprocal agreement between Ohio and Kentucky,
    so that an Ohio resident working in Kentucky pays tax only
    to Ohio on his earnings. If your sons are Ohio residents,
    and not Kentucky residents, they are not subject to Kentucky
    tax on their wages earned there. On the other hand, if they
    are Kentucky residents under the Kentucky law, then they are
    not eligible for the exclusion.

    There may also be an issue with respect to the credit for
    taxes paid to another state. If your sons are Ohio
    residents, but they are also considered tax residents by
    Kentucky, it is likely that Kentucky will tax their earnings
    but Ohio will not allow credit for the Kentucky tax paid
    (because of the reciprocal agreement).

    You need a knowledgeable practitioner who is familiar with
    both Ohio and Kentucky tax laws to sort this out.

    Katie in San Diego

    The foregoing is intended for educational purposes only and
    does not constitute legal or professional advice.

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    Katie Jaques, Feb 11, 2004
    #4
  5. "Melissa" <> wrote:

    > We have 2 son's attending college in Kentucky. They live
    > there, and work there. Our home state is Ohio.
    >
    > We were able to claim them on our Federal Return for 2003
    > because of they were full-time students.
    >
    > So, since they work in Kentucky, who do we file their State
    > returns with? They made about $6,000 and $9,000 each on
    > their part-time jobs.
    >
    > In Ohio, even if someone else can claim you on the Federal
    > Forms, you can file and claim yourself as well on the State
    > Return. I don't know if all the States are the same in that
    > regard.
    >
    > Advice or suggestions on where to get help is appreciated.


    Based on what you describe, in the worst case, they may have
    to file a Kentucky non-resident form and an Ohio form
    claiming a credit for taxes paid to Kentucky. Check your
    Ohio instructions and you can access the Kentucky
    instructions for the 740-NP at:

    http://revenue.state.ky.us/individual-2003.htm

    Kentucky and Ohio have reciprocal agreements where under
    certain circumstances Ohio residents are not required to
    file Kentucky non-resident returns. You will need to
    determine if they qualify for this based on the rules in the
    Kentucky instructions. If no return is required there, they
    may still need to file a form to request a refund of taxes
    from Kentucky. If a tax return is required for Kentucky,
    the credit for taxes paid to the nonresident state
    (Kentucky) is claimed in Schedule C of the Ohio IT-1040.

    Realize that if your two sons have abandoned their Ohio
    residence and do not have any plans to return to Ohio and
    have taken up permanent residence in Kentucky, you may have
    a very different tax situation.

    If all of this becomes too complicated, you may want to seek
    the services of a qualified tax preparer who can carefully
    review your situation and determine the scenario that
    applies to your situation.

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    Douglas T. Lee, Feb 11, 2004
    #5
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