A client has a child (college student) that worked part-time. The college student is claimed as a dependent on the parent's return and only had earned income. She is below the filing requirement, but we prepared a return for her in order to request a refund of the taxes withheld.
However, the state return shows she owes a small amount. The parents want to only file the federal return for the dependent, and not file the state return (California). Their thought is that she is technically not required to file a return, therefore, a CA state return doesn't need to be filed even though we are filing a federal return. Is this correct?
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If you can be claimed as a dependent, you have a different standard deduction. It cannot be more than the normal standard deduction. Your standard deduction is the larger of:
"....Their thought is that she is technically not required to file a return "
How'd they come up with that position? Owing seems to indicate otherwise.
Unless the daughter is a 17-year-old prodigy, she appears to be an adult and capable of making her own decisions. Have you asked her what she wants to do? For all we know, California might deny her a $50,000 scholarship in the future because of her failure to comply with California laws.
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