Discussion:Out-of-state student/dependent with income
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Discussion Forum Index --> Basic Tax Questions --> Out-of-state student/dependent with income
Discussion Forum Index --> Tax Questions --> Out-of-state student/dependent with income
| April 10, 2008 | |
| Student is studying in NYC. His parents, who claim him as a dependent because he's a full-time student under 24 for whom they provide more than 50% of support, live in CA. Student has NY income exceeding filing requirements in both states. My interpretation of the rules is that he is a CA resident with a "temporary absence" and must file a CA resident return and a NY non-resident return. Am i on the mark here, or can he claim NY residency and only file in NY?
Thanks | |
| 10 April 2008 | |
| It depends on all of the facts and circumstances. Is the student enrolled in a degree program in NY that will be completed in a certain period of time? Does he live in a college dorm or other temporary housing?
New York defines a tax resident as a person who is either domiciled in NY, or who is domiciled elsewhere but maintains a permanent place of abode in NY and is present in the state for more than 183 days, in the aggregate, during the taxable year. A student is likely to be in the state for more than 183 days, so the question for NY purposes is whether he maintains a "permanent place of abode" in NY. NYCRR 105.20 defines a "permanent place of abode" for this purpose as "a dwelling place permanently maintained by the taxpayer." The regulation goes on to say that "a place of abode, whether in New York State or elsewhere, is not deemed permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose. For example, an individual domiciled in another state may be assigned to such individual's employer's New York State office for a fixed and limited period, after which such individual is to return to such individual's permanent location. If such an individual takes an apartment in New York State during this period, such individual is not deemed a resident, even though such individual spends more than 183 days of the taxable year in New York State, because such individual's place of abode is not permanent." Thus even if your student lives in an apartment that he maintains year round in NY, that is not considered a permanent place of abode if it is maintained during a temporary stay for the accomplishment of a particular purpose -- such as the completion of a degree program that will take a certain number of terms or semesters to complete. Of course, even if the student is a nonresident, he must file a NY return and pay tax on his NY earnings. However, the NYC personal income tax does not apply to nonresidents, and NYC's definition of a resident is exactly the same as the state definition. For California purposes a somewhat similar analysis applies, even though the statute is quite different. Under California law, a resident is a person who is either present in California for a purpose that is not temporary or transitory, or domiciled in California and absent for a temporary or transitory purposes. There's that word "temporary" again. Absence for purposes of pursuing a degree program for a fixed period of time is a temporary absence, even if it is for two or three years. He's probably still a CA resident. Of course for both NY and CA purposes, ALL of the relevant facts and circumstances need to be taken into account, and all we know about this case is the facts you have given us. Based on those facts and some assumptions (e.g., the degree program), it would appear your client's son is a resident of CA and a nonresident of NY. However, additional facts could lead to a different result. | |
