Moving back home after college to start new job

- Daughter is graduating in June year from college 1000 miles away in IL where she maintains an apartment with a roommate, is on the lease and pays utility bills. She moved into the apartment at the end of Sept 2013. She has always claimed MA has her residence, but we're rethinking that for her last year of college since she has an apartment, and might be able to deduct moving expenses.

- She just accepted a job in our hometown in MA and will be moving back home in June 2014. I'm I'm trying to figure out if she can deduct moving expenses associated with moving back to MA. She will be in the 15% bracket in 2014.

- She plans on moving into an apartment in MA Sept 2014.

- She earned around $8,000 in MA over the summer at the same company while living at home. She was formally terminated at the end of the summer, then rehired permanently in 2014.

- She is a dependent for 2013 in the sense that we pay more than 1/2 of her support, though we do not claim her because our exemptions are phased out anyway and it's more beneficial to get the small amount of federal taxes she would otherwise owe eliminated through the American Opportunity Tax credit. She does not get a refundable credit though.

- MA allows a voter to vote before an election, and she voted in Sept on the day before she moved back to school for a special election held in Oct 2013.

- She's on our health insurance since she is a full-time student.

- She renewed her MA drivers license in Nov 2013.

- She never voted in IL or made any other attempts to move her official domicile to IL.

- She moved the apartment's utilities into her own name in Dec 2013.

- She does maintain a checking account in IL

- I mention the last few items as considerations of determining domicile.

- I believe that she will pay more than 1/2 of her own support in 2014 so she will no longer qualify as a dependent in 2014.

2) Are there any other implications about claiming Illinois residency from Sept 2013 to June 2014. There don't seem to be any tax implications since all income will be earned in Massachusetts, and no income will be earned while she is an Illinois resident. We have to make sure it doesn't affect her ability to stay on our health insurance or car insurance - she doesn't have a car at school but is on our insurance as an occasional driver.

Any other advice would be welcome. If the move costs about $1500, she would only save $225, so we don't really want to push the line, but if it makes sense it makes sense.

=================Residency/domicile questions are always tricky. I say no. She was only temporarily away from home while at school. Because she maintained ties to her permanent home, she never abandoned it. Therefore, moving back home is not deductible.

I agree with D. Stussy.

Your daughter was away from home temporarily to obtain her degree. She remains a domiciliary of MA. She is not self-supporting and that is why she is your dependent as a qualifying child. She can take the AOTC because you have decided not to claim the dependency exemption you are entitled to on your return. She can not claim her own personal exemption on her tax return as she is your dependent. As her domicile is MA, there is no tax deduction to relocate from IL to MA.

Also note that this is your daughter's first full time job. The rules for deducting moving expenses in this instance are the same for any other condition except the distance test is different. The job location must be at least 50 miles from her MA home. Even then, the deductible amount would be the cost of moving from her MA home to her new home not from IL.