Internship year tax question

[seetheseblocks99]

Hi folks, first time poster, long time lurker. Happily matched to an internship that is ready to begin and I have a tax question that unfortunately, I don't have anyone I can really ask about.

I moved out of state for internship and plan to return home (also the same state of my PHD program) after the year is done. I am filling out standard onboarding paperwork and I am confused about whether my home state taxes should be with-held, or if my internship state taxes should be with-held. Without accidentally doxing myself, my internship state also has a reciprocal agreement with my home state.

I'm not sure if I am considered a resident of my internship state due to being a student/intern but admittedly I am very confused by all of the paperwork/residency jargon. I also wonder if there is an element of "what you are supposed to do on paper" versus "what other students do in reality."

Does anyone have experience dealing with this kind of situation?

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[WisNeuro]

You can file partial year resident returns in state taxes. Also, may depend on where you are legally residing, and tax rules about established residency while enrolled in school. As for your current withholding, check with a tax professional, but I believe that should be where you physically live and work.

 

[PsyDr]

1) Do not screw around with this. Some states will sanction your professional licenses for unpaid state taxes. You do not want this in your early career. It's really not worth it.

2) Your taxes are paid where you earn the money.

3) Your internship state is your new state of residence. The government views you as an adult who moved.

4) Your "new" state likely requires you to get a drivers license within ~ 90 days of moving there. Cops can be jerks about this. When you get your new DL, it lets the state know you are now a resident, for tax purposes.

 

[foreverbull]

I can only speak to my experience, but I established residency as soon as I switched states for internship and only paid taxes there for internship’s duration. New driver’s license, etc. It simplified the tax situation. The next year, I filed state taxes in 2 states because I had W2s in two states, but that was also pretty straightforward at the time.

When you move back, you can always re-establish residency there by doing the same thing upon your return.

When I finished internship, I moved to a new, second state and established residency there immediately by updating my address and getting a new driver’s license again.