Q. My son is in college in Pennsylvania and has a part-time job. He is my dependent and a permanent resident of New Jersey. What tax forms will he have to file?
A. Great question. He may need to file several forms.
First, according to the 2017 Pennsylvania Personal income tax instructions, he would need to file a tax return if he received total Pennsylvania gross income taxable income in excess of $33, said Michael Maye, a certified financial planner and certified public accountant with MJM Financial in Gillette.
“That rule applies to both Pennsylvania residents, part-year Pennsylvania residents and non-residents,” Maye said. “In addition, the instructions further state that Pennsylvania does not exempt a minor from the previous requirements to file a Pennsylvania tax return even if that minor is claimed as a dependent on a federal tax return.”
A parent or guardian must file on behalf of the minor child in such circumstances, he said.
The state of Pennsylvania also publishes a guide called “Personal Income Taxes for College Students (REV-758).”
According to this brochure: “Unless a student considers PA to be his new home, is supporting himself, and has established a permanent abode in PA, the student is considered a nonresident. The student should file as a resident in the state where his parents live, and file a tax return in PA as a nonresident.”
This would seem to describe your son’s situation so for Pennsylvania tax purposes he is considered a non-resident, Maye said.
Pennsylvania and New Jersey also have what is called a reciprocal tax agreement.
“The agreement states that one state will not tax the other state’s residents on compensation subject to employer withholding,” Maye said. “These agreements apply to employee compensation only. Since your son is a resident of a reciprocal agreement state, he can ask his employer to withhold the home state’s income tax which in this case is New Jersey from his paychecks rather than Pennsylvania income tax.”
If his employer has already taken out the Pennsylvania income tax, he can request a refund, Maye said.
“Report zero taxable compensation on Line 1a and the amount of Pennsylvania tax withheld on Line 13 of the PA40,” Maye said. “Submit an explanation stating you were a resident of the reciprocal state in the taxable year.”
Maye said non-resident students working in Pennsylvania without reciprocal tax agreements are required to pay taxes on income earned in Pennsylvania. They should report income earned in Pennsylvania by filing a PA-40 tax return and filling in the oval for “Nonresident.”
“Students should check with their home states to see if they may claim credits for taxes paid in Pennsylvania,” Maye said.
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