All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: Scholarship Income

[ Edited ]

Hello tp175,

 

The scholarship income is treated as wages on federal. For the Maryland nonresident return, they are treated as "other wage items" if using the H&R Block desktop/downloadable software. They are included in the same category as "wages, salaries, tips, and so on." Therefore, the scholarship income is part of wages on the Maryland return.

 

To answer your question about what type of return to file for Maryland and Ohio: 

 

According to Maryland residency rules:

 

Residents. Residents are individuals:
• Who are domiciled in Maryland for the entire year, or
• Who have a permanent home outside Maryland, but who maintain a place of abode in Maryland for more than six months of the tax year. The individual must file a full-year resident return if physically present in Maryland for more than 183 days.

 

Part-year residents. Part-year residents are individuals who move into or out of Maryland during the year.

 

Nonresidents. Nonresidents are individuals who are not residents of Maryland during the year.

 

Therefore, if the dependent has maintain a place to live in Maryland for more than 6 months of the year in 2017 while having a permanent place of living outside of Maryland, then the dependent would have to file a full-year Maryland resident return. If the dependent has been physically present in Maryland for than 183 days, then the dependent would also file a full-year resident Maryland return. If the dependent does not maintain a place to live in for more than 6 months of 2017 in Maryland, then the Maryland return would be filed as nonresident.


According to Ohio residency rules:

 

Resident. An individual is a resident if domiciled in Ohio for the entire year.

 

Part-year resident. An individual is a part-year resident if he or she permanently moved into or out of Ohio during 2017.

 

Nonresident. A nonresident is an individual who was domiciled outside of Ohio for the entire year.

 

The taxpayer will be considered a nonresident of Ohio if he or she meets all of the following requirements.
• The taxpayer has less than 213 contact periods in Ohio during the taxable year,
• During the entire taxable year, the taxpayer had at least one abode outside of Ohio,
• The taxpayer did not change domicile to or from Ohio during the taxable year,
• Before June 1 of the immediately succeeding calendar year the taxpayer files the affidavit of non-Ohio domicile, and
• The affidavit does not contain any false statements.

 

For Ohio residency rules, if the dependent meets all of the requirements listed above for the Ohio nonresident status, then the OH return would be filed as a nonresident return. If the dependent has been living in a permanent place location in Ohio for the entire year, then the dependent would be filing a OH resident return.

 

To provide additional details about the Ohio nonresident rules, domicile means living in a permanent location in Ohio. For contact periods, there is an example found on this Ohio government website here that explains what contact periods mean:

 

"For example, an individual spending any portion of two consecutive days in Ohio (e.g., portions of Monday and Tuesday) has one contact period in Ohio, but an individual spending any portion of each of two nonconsecutive days in Ohio, (e.g., Monday and Wednesday, but not Tuesday) has no contact period in Ohio for those two days."

 

Now, depending the circumstances for the dependent child, the dependent child maybe either filing a full-year resident Maryland return and a nonresident Ohio return at the same time or filing a nonresident Maryland return and a full-year resident Ohio return.

 

Regards,

 

Lawrence
Tax Research Specialist

Esteemed Pioneer
Posts: 16
Registered: ‎03-22-2018

Re: Scholarship Income

Lawrence,

 


Thanks for information.

 

I need to clarify my question.

 

Let say, the school is in Ohio but wages are derived from Maryland.  I would have to do a non resident Ohio and  a non resident Maryland, correct?

 

 

Dependent is a full time student at Ohio where he gets the scholarship.  He is there about 9 months.  He takes a summer job in Maryland.  His home is in NJ.  So, wouldn't his residency be NJ?

 

 

Highlighted
Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: Scholarship Income

Hello tp175,

 

Since Maryland was for his summer job, then the Maryland return would be a nonresident return in this case.

 

According to NJ rules for residency:

 

"Full-Year Resident — Form NJ-1040
- New Jersey was your domicile (permanent legal residence) for the entire year; or
- New Jersey was not your domicile, but you maintained a permanent home here for the entire year and spent more than 183 days here."

 

"Part-Year Resident — Form NJ-1040
- New Jersey was your domicile (permanent legal residence) for part of the year; or
- New Jersey was not your domicile, but you maintained a permanent home here for part of the year and spent more than 183 days here"

 

"Nonresident — Form NJ-1040NR
- New Jersey was not your domicile, and you spent 183 days or less here; or
- New Jersey was not your domicile, you spent more than 183 days here, but you did not maintain a permanent home here.

 

Also you may be considered a nonresident for New Jersey tax purposes if you were domiciled in New Jersey and you met all three of the following conditions for the entire year:
1. You did not maintain a permanent home in New Jersey; and
2. You did maintain a permanent home outside New Jersey; and
3. You did not spend more than 30 days in New Jersey"

 

Also, according to NJ rules: "Domicile. A taxpayer’s domicile is his or her permanent home, the place where the taxpayer intends to return after a period of absence (vacation, business assignment, educational leave). A taxpayer has only one domicile, although he or she may have more than one place to live. Domicile does not change until a taxpayer moves to a new location with the intent to establish a permanent home there and to abandon the NJ domicile. Moving to a new location, even for a long time, does not change domicile if the taxpayer intends to return to NJ. A temporary job assignment outside of NJ does not change domicile."

 

If the dependent's residency in NJ is of permanent legal residence and the dependent has the intent to return to NJ after finishing his studies in Ohio, then the dependent's NJ return can be filed as a full-year resident return.

 

As for the Ohio residency rules, the dependent can file a OH nonresident tax return, only if he meets all of the requirements below:

"The taxpayer will be considered a nonresident of Ohio if he or she meets all of the following requirements.
• The taxpayer has less than 213 contact periods in Ohio during the taxable year,
• During the entire taxable year, the taxpayer had at least one abode outside of Ohio,
• The taxpayer did not change domicile to or from Ohio during the taxable year,
• Before June 1 of the immediately succeeding calendar year the taxpayer files the affidavit of non-Ohio domicile, and
• The affidavit does not contain any false statements."

 

To provide additional details in regards to the Ohio nonresident status on contact periods, below is an example, found on this Ohio government website here on what contact periods mean:

 

"For example, an individual spending any portion of two consecutive days in Ohio (e.g., portions of Monday and Tuesday) has one contact period in Ohio, but an individual spending any portion of each of two nonconsecutive days in Ohio, (e.g., Monday and Wednesday, but not Tuesday) has no contact period in Ohio for those two days."

 

Overall, the dependent's Maryland return is going to be a nonresident resident due to the fact that he was there only for a summer job. He can file a NJ full-year resident return if NJ is the place of his permanent legal residence and has intentions to return to NJ after finishing his university studies. The OH return can be filed as nonresident as long he meets all of the requirements that are laid above.

 

Regards,

 

Lawrence
Tax Research Specialist

Council Member
Posts: 514
Registered: ‎04-06-2016

Re: Scholarship Income

I think there's an exemption for students having to file as a resident of any state if they're only a resident there for the "resident" number of days because they're a student.  I'd look into this more before filing an OH resident return, especially if they're paying out-of-state tuition.

 

Karen

Esteemed Pioneer
Posts: 16
Registered: ‎03-22-2018

Re: Scholarship Income

 

 

In my resident NJ return, the scholarship income did not carry over onto line 14, wages,salaries, tips.  So, should I report it under Other NJ income with check box on scholarship or fellowship grants?  The next page ask for payer, amount and payer ID.  I don't know the payer ID.  Is that required?

 

Thank you.

Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: Scholarship Income

Hello tp175,

 

According to NJ state tax rules, taxable scholarship income "must be included on Line 25." So, it will not be reported on line 14 for wages, salaries, and tips on the NJ tax return. In regards to the payer ID, it is required to enter it in the tax software. To find out what the payer ID is, contact the organization that provided that scholarship to the dependent on what their payer ID is and enter that in the tax software.

 

Regards,

 

Lawrence
Tax Research Specialist

Esteemed Pioneer
Posts: 16
Registered: ‎03-22-2018

Re: Scholarship Income

Thank you Lawrence.

 

Just want to make sure.  For the NJ resident state return, all earned income and unearned income is reported regardless of where it was source from.  For example, the scholarship income is not from NJ but will be reported in NJ resident state return.

Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: Scholarship Income

Hello tp175,

 

A full-year resident state tax return is going to be report all earned and unearned income regardless of where it was source from. Therefore, for this NJ full-year resident return, the scholarship income will be reported even though it is not sourced from NJ.

 

Regards,

 

Lawrence
Tax Research Specialist

Esteemed Pioneer
Posts: 16
Registered: ‎03-22-2018

Re: Scholarship Income

Thank you for your help!