'"Katie" <katiej_1958[at]yahoo.comwrote:

[snip]

- quote -

[snip]

I must thank you again Katie for a very clear and complete
explanation, and wonder how you know so much about NY and DC
tax regs way out west in San Diego :-) The "full year
resident of both states" was the part I really didn't
understand before reading your note.

As I said in my original note, I expect that 99% of college
students do not know that they may be residents of two
states and just ignore taxes in the state where they are
going to school.

My son's W-2 and non-government 1099-INT income is too low
to trigger income taxes in either state. He does have
1099-INT income from EE Bonds, but they are exempt from NY
taxes and I assume DC taxes. So, it is just a matter of
filing the forms, not paying any more tax.

He is currently an undergraduate. Once he graduates I expect
him to change his domicile to where he is living.

--
Vic Roberts
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Katie wrote:
- quote -

I must be getting better at this as my answers are starting to
look like yours. (

--
Alan
http://taxtopics.net

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Victor Roberts wrote:

- quote -


In words of one syllable: No. <G
Under the conditions you describe, your unfortunate son is a
full year resident of New York. If he is domiciled in NY,
there is no provision for him to be a part-year nonresident;
he's always a resident as long as his domicile remains
there, unless he meets one of the statutory exceptions
(30-day or foreign presence).

He is also a full or part year resident of DC, depending on
when he went there. If he was working in DC for the entire
year, then he is a full year resident of DC. If he went
there at some point during the year, he is a part-year
resident from then on.

Your son meets the definition of a resident in both states.
This is not as uncommon as you might think. In fact, anyone
who is domiciled in a state with a definition similar to New
York's, where virtually all domiciliaries are considered
residents, and spends more than half the year in a state
with a 183-day or similar rule for nondomiciliaries like
DC's, will end up being a resident of both states at the
same time. (In fact, the two states' statutory definitions
of residence for tax purposes are virtually identical. The
only difference is that for non-domiciliaries, DC defines a
resident to include anyone who maintains a place of abode in
the district for 183 days or more, while NY requires BOTH
maintenance of a place of abode AND presence in the state
for 183 days or more.) You can only have one DOMICILE at a
time (although two states may disagree as to which is your
domicile), but you can be a tax RESIDENT of more than one
state.

New York will allow credit for the tax your son pays to DC
on his DC-source income. Unless he has a significant amount
of income from intangibles (interest, dividends, capital
gains on stocks, etc.), he shouldn't be subject to any
double taxation. However, he'll end up, net, paying tax on
his DC earnings at the higher of the two states' average
rates for his filing status, income level, etc.

You cannot be a part-year resident of each state, though.
Doesn't work that way. You are a part-year resident only if
you move from one state to another during the year.

I presume your son is an adult. If he is going to be
working in DC for a while, he should abandon his NY
domicile. I gather he does not maintain a home of his own
in NY, but stays with you when he is there. All he needs to
do is move his driver's license, voter registration, vehicle
registrations, memberships, bank accounts, etc. to DC and
make that his home.

Katie in San Diego

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

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Victor Roberts wrote:

- quote -

It appears that what we have here is someone who is living
and working in the D.C. who is maintaining his NY domicile.
He is a resident of the D.C. and he is a resident (not
part-year) of New York unless he meets the three conditions
that make him a nonresident. One of those conditions is the
30 day rule you mention and the other two are he doesn't
maintain a permanent place of abode in NY in the tax year
and he does maintain a permanent place of abode in another
place for the whole year. That said, it sounds as though he
is also a NY resident because he can not meet all 3
conditions. He would file his D.C. resident return and pay
his taxes to the D.C. As a NY resident he would file the NY
resident return and then complete the NY form or schedule
that computes a credit for taxes he has to pay the D.C. on
the same income that NY is taxing.

--
Alan
http://taxtopics.net

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Victor Roberts <xxx[at]lighting-research.com> wrote:

- quote -

I seem to have an answer to the root question from my
corporate accountant. He says that undergraduate students
are exempt from the 183 day rule and are full-year residents
of their domicile state. (However, I found a State of
Virginia web site that claims students are not exempt from
the 183 day rule - but I am dealing with DC not Virginia.)

--
Vic Roberts
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I am confused about the definition of "resident" for income
tax purposes. I thought you could only be a resident of one
state at a time, even though I know you can move during the
year and be a resident of more than one state during a
particular year. However, I now believe that it is possible
to be a part-year resident of two states by alternating
where you spend your time.

The instructions for the NY IT-201 state "You can only have
one domicile." My son votes in NY, has a NY driver's license
and considers NY to be his permanent place of residency, so
I believe his domicile is NY.

The IT-201 instructions then go on to state that if your
domicile is NY you are a resident of NY unless you spent 30
days or less in NY during the taxable year. (Excluding the
foreign country option.) Since he spent at least 30 days in
NY for vacations and such during the year, he is a resident,
or at least a part-year resident.

DC seems to have a different definition for resident. There
are no specific definitions for resident in the instructions
for Form D-40, but Form D-40B, the Non-Resident Request for
Refund states "A nonresident is anyone whose permanent home
was outside DC during all of 2004 and who did not live in DC
for a total of 183 days or more during 2004.

Since my son did live in DC for more than 183 days then he
does not meet the conditions to be a non-resident of DC.

I can only conclude that he must be a part-year resident of
both NY and DC, even though the time he spent in NY was just
in 1 to 2 week periods spread throughout the year.

Does this make sense?

--
Vic Roberts
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