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    Independent's Avatar
    Independent Posts: 5, Reputation: 1
    New Member
    		  
    #1

    Apr 17, 2006, 09:56 AM
    State taxes--source of income/residency
    Hi

    So I was a student in NJ till last June (I'm still on F-1 from India), currently doing OPT in IL. I received a fellowship award to come work in IL for 11 months--the income was reported on 1099-MISC box 3. I'm filing as an independent contractor for my federal return. The non-profit that gave me the income has their office in NJ, but I have not worked there at all, as the money was given entirely for work done in Chicago.

    My question is-- for my state returns, is this income NJ source income? i.e do I need to file a part-year non-resident return there? And then, claim a credit for taxes paid there in my IL part-yr resident return? Or can I just file the IL return and pay the taxes here? ( I will anyway be filing a part-yr NJ resident form as I received some income in the first half of the year)

    Thanks!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 17, 2006, 06:37 PM
    If you earned the income in Chicago, then that is Illinois-based income and you owe taxes ONLY to Illinois. Do not claim the 1099 income on a NJ return.
    Independent's Avatar
    Independent Posts: 5, Reputation: 1
    New Member
    		  
    #3

    Apr 18, 2006, 08:34 AM
    great! I filed yesterday afternoon after spending the morning searching through websites, and deciding that shld be the right answer-- so I'm glad I don't need to go back and re-do mistakes! =)

    Thanks for the help!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Apr 18, 2006, 10:01 AM
    Glad to help!
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