Taxes

Where his official residency is. If he moved out of state to go to school and wanted to change his official residency then he would have to look at that states guidelines and officially request to change it, ie go to the DMV or get a residency card from that state. He will likely be a resident of "whence he came". As always check with your accountant.    Because my son moved from the Peoples Republic of California, he changed his residency to where he spent the most time. (and had no state tax) He had to go down to the DMV with the appropriate paperwork proving he was a resident. 

BOF has it right, IMO.  Just because a student is at a college out-of-state normally does not mean that the student is a resident of the state where he attends college. He is still a resident of "whence he came".

Now if he does something to try to establish residency in the college-state, then that is a different story.

If son "signed" in a state that he is not a resident, then he might be entitled to a refund of those state income taxes.

I dont think it matters where he signed, taxes will be refunded according to his situation. The tax is according to where each paycheck was cut or in each case where he worked. RFF mentioned that abut refunds.

FWIW, he should  file for each state he may have played in (even if he didnt pay any tax). In other words he has to file where his checks (any) came out of.  In most circumstances whatever state taxes he paid he most likely will get back. He should be saving all receipts that pertain to spring training or job related. A qualified accountant will decide what to use and what not to.

Major league athletes are subject to state taxes in every state they play. Does the law apply to minor league athletes? Is there an income level that makes the law applicable?

Short answer to 1.  Yes.  Short answer to 2.  No.  Start of long answer to 2.  No but if it is a small amount and depending on how the tax withholding forms are filled out, there may or may not be state and or local taxes withheld.  Location of the work performed governs.  i,e,, construction workers from Ohio working on a project in Indiana get Indiana taxes withheld on those wages (or should) New Jersey resident working in Manhattan gets NYC and state taxes withheld.  Have to file non resident tax returns in those non resident state(s), to pay additonal taxes or receive refunds.  If income is high enough, (varies by jurisdiction), return is to be filed regardless of whether tax is owed or not.  However, you will always have to file to get a refund.  They won't automatically send it to you.  You can receive a credit on your resident state return for taxes paid to other states as well.  Again, the methodology changes from state to state.  You generally do the the returns for the non resident states first, so you have the actual tax paid to them so you can use the correct amount to claim on your resident return.  

Happy tax season.

General rule of thumb: residency is living in a state 6 months and 1 day. Other items that the service looks at; where do you have a drivers license, where are you a member of a church. These are indicators of residency.

That being said; many states are looking to maximize revenue by creating rules that require filing a tax return for certain events. An example is you are a resident of one state but own property in another; you sell the property in the other state creating income. Many states will want to tax revenue from capital transaction occurring in that state.

Just how you establish residency will depend on each state as they are NOT all the same. Typically, residency can be established in 6 months and in some cases is might take a full year.  But basically it's where you live and have your mail sent to.  Once you establish just where your "residence" is, just how you'll be taxed depends on the state of residence as some will tax income earned out of state even though it's taxed in some other state (it's not common and I don't know which one's they are).  For the most part, one it taxed only in the state in which there were earnings and a resident state will credit those amounts.  But resident state filing must occur whether there was earning in that state or not.

Here's an example:  

California resident drafted out of college sent to Ohio where he signed and took 1/2 of bonus and played there all of Short Season.   For that tax year, a California resident tax from was filed for the full amount earned and an Ohio non-resident tax form was filed for the full amount.  California credited back whatever the tax was charged inn Ohio.  But there was still a small tax liability for California.

The following year, the player moved residence to Arizona at the beginning of the year and played a full season in North Carolina.  Player received second half of bonus as a direct transfer which is taxable in Arizona (not California or Ohio this time) and the salary earned while playing in North Carolina is taxed for that state only. . .even though they played games in other states.  

Because the team is based in North Carolina, this is what determines that tax base.  If the player have moved to a different team that same year, the earnings from that's teams base location would be taxed to that state.

These topics have always moved the free agent amrket in MLB. For example, Texas has an advantage in negotiations because a player will play more than half his games in a state with no state income tax. Similarly, the Blue Jays have to deal with tax issues when signing FAs.

The tax situation for ML players is very complicated and there are accountants that specialize in this. The reason it is complicated is because most players live in different places differences.

The taxes that come out of the ML check is where the ML team is located, and that can include from FL or AZ where there are no state taxes withheld.  

For milb players, their checks are drawn from the team where they play.  There are different scenerios for where your home state is vs where you play.  

http://www.bankrate.com/financ...athlete.aspx#slide=1

That little article covers it better than I could.  With respect to Milb, that is a different situation, as I do believe, but haven't researched, as they are employees in a much more typical sense than the MLB players, who are obviously much better compensated and easier to track for the "jock tax" as the article refers to it.  States and cities aren't going to go after that percentage of a relatively small amount.  Just not worth the effort, whereas, major league athletes are easy targets, so to speak.

However, the residence state, if applicable, will need its return filed, as will the non resident states to be in compliance.