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I'm an F-1 Student, currently on OPT and came to US in Aug-2007.
Jan-May 2008-I did some school work(TA and library) and earned less than $3000. My school is in north carolina.
June to Aug 2008-Internship in New Jersey where they did not cut any FICA but deducted federal as well as NJ state tax.
Sep-No earning but I was staying in NC.
Oct 1-Present-I got an offer from the same company and started working full time on OPT from 1st Oct. In total (internship+full time)I earned in NJ appx $30k.
I can file Federal Income tax return easily.
My Questions are regarding state tax return-
1) Should I file returns for NC and NJ both or just NJ as NC earnings were too low??
2) If both, then do I file as part year residents or non-residents(as I'm filing federal as non-resident)
3) Will it be problem with IRS if I bought a car and registered it in NC. I brought the car to NJ in Jan. The car was registered and garaged at my previous residence in NC till DEC(although I moved to NJ). I never used in NJ and also paid NC property tax for it in Dec. I dont believe its a problem but just curious.
1. Check the filing requirements of NC on NC state website.
2. NC you are part year resident. NJ you are part year resident or resident (check NJ residency requirements). You will file federal return as non-resident and Form 8843.
I kept NC as my residence because in this economy I needed something to fall back. So I had a rent lease from Jan-Dec-2008 in NC. In NJ, I never had a permanent residence. It's only now(Jan 2009 onwards) I've decided that I will staying in NJ for a while. So does that make me a part-year non-resident for NJ and resident of NC for whole year? Also do I show income earned in NJ in the NC form as well? Thanks, I really appreciate your help.
If you claim being a full-year resident in NC, you will need to file as a non-resident for NJ for 2008.
You will still pay NJ income taxes for income earned while within the NJ state borders, but NC should give you a tax credit for the taxes you paid to NJ. This avoids being taxed double on the same salary.
This is a somewhat complex state tax calculation, so you really should get professional tax help. Make sure the tax pro recognizes your non-resident alien status and files Form 1040NR or 1040NR-EZ plus Form 8843 for your federal return.
Further, because you maintained a permanent residence in NC, you probably meet the criteria for being able to deduct your daily living expenses while working the internship in NJ from June-to-August 2008. However, this is an itemized deduction, and, if you are from India, it may NOT exceed the standard deduction of $5,450 which, as an Indian student, you are allowed to claim on your Form 1040NR.
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