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Here it is 15 days away and I get a new state! Long-time client went to law school at Georgetown and lived in DC for spring and fall semesters, back to his NY apartment for the summer of 2019. (For 2020, graduated and married and is in CT for the time being, so his mailing address on his returns will be CT but did not reside nor work in CT during 2019.) Anything I need to know about a part-year DC return? Or would you file as PY? He was a 2018 resident of NY. Maybe a 2019 NY resident with NR DC? Still anything I should know about a NR DC return? Thanx for your thoughts.

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I can help you with the part year return. It is very simple, enter the dates lived in DC... I usually pay them their fair portion of the tax on DC 40. For example, is someone lives from January 1, to May 31, and then went back to his state and came back to DC September 1, and stayed for the rest of the year, I enter the dates to include 8 months in the district and since in this case the other state is far away, I enter the amounts based on the W-2 information. In this case, I would enter the whole amount for DC. DC doesn't have D-40NR

Let's say that you work for the red cross and you lived 8 months in DC and 4 months in another state, I would use this formula to calculate DC fair's portion.  I would enter the W-2 income on form 1040. That whole income would be transfer to DC income. On page 2, line 8, income received while non-resident, I would enter the enter =(W-2Income\12*4) and the rest will be done automatically. Provided that you... on data tab, entered the correct dates that will be ONLY 8 months. Same is true for someone who works in VA, lives in the District and in the middle of the year moves to MD keeping the same job. In this case, VA gets 0, MD gets 1/2 of the income and DC gets the other half due to the reciprocity agreements. People here in these three states only pay income taxes where they live.

NT.- About 10 years ago, I sent ATX the formula that they should use to help us not to make a mistake when entering the dates of residency and they didn't fix it. So for example, you have a single person who lived in the district from June 1, 2019 until the end of the year and you by mistake enter from June 1, 2019 until Dec 31, 2020, the program will give you a standard deduction of more than $18,000. By the way, DC follow the new Federal Standard deduction and no personal exemption. And if you enter the date of Dec 31, 2021, you will get a bigger standard deduction and your Earn Income Credit which is 32% of the federal will be almost as big of the federal. 

Thank you for reading the previous paragraph which you can eliminate because we, tax preparers, never make a mistake, correct?
 

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OK, information continues to dribble in for this whole family (two trusts, two grown sons, and parents, with everyone of them spending time in two or more states). Son remembered he has a W-2 from working in NY during the summer. He was in law school at Georgetown in the spring and fall. In 2018, he was a NY resident, and in 2020, he's a CT resident. NY considers you a resident until you establish residency in another state, and college is their very definition of temporary absence. Son let his NY apartment go, but his only earned income in 2019 was in NY (maybe commuted in from CT with his father or stayed with girlfriend/fiance in NY). He has a lot of investment income (old trust from his grandparents) so DC would tax about 9/12 of that if he's a PY or FY DC resident. But, I'm thinking he's really still a NY resident with a temporary absence for law school. Agree or disagree?

It's a good thing these folks are really nice, because this year they're a mess!

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How much Federal income does he have?

His standard deduction for 3/4 is 9K. DC counts physical presence... so, he will have to pay taxes on 3/4 if he lived in DC 9 months.

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52 minutes ago, Pacun said:

How much Federal income does he have?

His standard deduction for 3/4 is 9K. DC counts physical presence... so, he will have to pay taxes on 3/4 if he lived in DC 9 months.

So does DC count college students as physically present/resident for income tax purposes?  Even if they have no earned income in the district? 

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It seems that this person had income from DC based on the original post.

It is interesting also to see that the poster didn't say that a W-2 was issued but I was under the impression.  According to what I read, it seems that the requirement is physical presence of more than 183 even if you are a resident of another state. 

But I have never seen a return prepared for students who are wealthy and are earning soft earned money while attending American, Catholic, Howard, George Washington or Georgetown Universities.

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His W-2 is from Adobe in NY where he worked as a paid intern for the summer. His 2018 residency had been NY. NY is going to say he's still a resident, because he didn't "stick the landing," establish residency in any other state. He rented an apartment in DC for more than half the year -- in order to go to Georgetown law school. After graduation, he returned to his parents' home in CT and married. The virus hit, so he's not taken a job anyplace, but his prospects are in NY, perhaps back with Adobe.

I know how aggressive NY is regarding its residents and know NY will want to tax him on all his 2019 passive income as a resident. His only earned income is NY-sourced.

My question is -- how aggressive is DC? I don't have any practical experience with DC. Does DC think he's a resident because he was a grad student for more than half the year? Do students need to file PY DC returns? 

$34,000 W-2 from NY plus $3,100 D&I plus $28,000 CG, but $60,000 tuition. Using NY rates vs. DC rates, I'd rather have him a DC resident, but NY will still tax him on the $34,000 (and 1/3 of the investment income if a NY PY).

If DC is as aggressive as NY, then for 2020 both states will be chasing him to say he didn't leave, especially if he's still at his parents' house and not his own residence!

I want to do this right and be able to convince the son I'm doing it right (at least three lawyers in the family now). I know what NY says about a resident out of NY for college. I don't know if DC has tried to claim 30-year-old grad students as residents and if they've prevailed.

What would you do if you know both NY and DC? What would you do working with the type of family that you know you need to justify how you prepared the returns?

Pacun: he earned his law degree at Georgetown.

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I have never seen a return for students just because they study here or students from many DC universities trying to file DC taxes just because they lived in the district more than 183 days if they didn't work. 

I am pretty sure that NY is well more (much more) aggressive than DC.

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I think NY is the most aggressive, along with CA maybe! That settles it. NY resident. No DC-sourced income.

Wow, the only one in the family with only one state this year. 2018 he moved from NJ to NY and then entered law school; the rest of his family has CT, NY, UT, and CO.

Dad's still missing a W-2 and one of the trusts is missing a consolidated 1099, but now I'm one step closer to completing returns for this family.

Anyone disagree with NY resident with no DC-sourced income?

Love you all. Stay well.

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