Virginia preparers----need some help 2011

[ttbtaxes]

I have a client who is definitely a resident of NYS (voting, license, etc.) She took a job in Virginia in Dec 2010 and lived in Virginia during the entire 2011 year. It was always going to be a temporary job as she will be going to law school in Sept 2012.

If I understand Virginia laws, she must report all of her W-2 earnings in Virginia and file a resident tax return, Form 760. That surprised me as I was expecting she'd file a non-resident return with 100% of her earnings taxed in Virginia then file a resident NYS return with a credit in NYS for taxes paid to VA.

Questions:

1) Is my understanding correct that if she lived and worked in Virginia for the entire year she must filed a 2011 RESIDENT VA return?

2) She must also file a RESIDENT NYS return which my software isn't cooperating whatsoever with right now.

[Possi]

Military?

Is she military or a military spouse? Or does she work for NASA where she can claim a different state as her home of record?

Even though she holds the NY license, Virginia is most likely her "tax home" for tax purposes.

[Gary2]

Did she maintain a home in NYS? NY, for all its aggressiveness about telecommuters and such, has a rather generous rule that if even if you're domiciled in NYS, if you spend fewer than 30 days in NYS during the year, don't maintain an abode in NYS for the entire year, and maintain an abode in another state for the entire year, then for income tax purposes, you're a NYS non-resident (domicile notwithstanding).

[ttbtaxes]

No. She does not meet the military or congressional exemptions.

Not sure what the argument is for VA being her tax home. It seems to me her tax home is still NYS. She went to Virginia for a temporary job during a temporary time period. She has always mean to return to NYS and will. She votes in NYS, has her drivers license there and has always intended to stay a NYS resident.

[Lion]

Her tax home is where she works, if she took a job that's expected to last or does actually last a year. If she went down there in December 2010 and doesn't expect to start law school or whatever until the fall of 2012, she most definitely is a VA resident. In fact, school could be considered a temporary absence, in case she doesn't do something more specific about moving out of VA.

[Gary2]

No. She does not meet the military or congressional exemptions.

Not sure what the argument is for VA being her tax home. It seems to me her tax home is still NYS. She went to Virginia for a temporary job during a temporary time period. She has always mean to return to NYS and will. She votes in NYS, has her drivers license there and has always intended to stay a NYS resident.

Tax home has nothing to do with domicile. It generally has nothing to do with state residency and filing, either. The only point about tax home is that VA is her tax home and it doesn't qualify as a temporary assignment for the purposes of deducting travel and lodging in VA on her federal return.

As I said, NYS is surprisingly generous in these situations.