New Beginnings: My DD's Journey to Oregon

[tulak]

DD is moving from Washington state to Oregon for graduate school. I've never had to deal with moving states - or state income taxes - and I'm wondering what's the best approach?

She'll be an employee of the university while working towards her doctorate. We don't know where she'll end up, but let's assume that she plans to leave Oregon after 5-6 years and return to Washington. While in Oregon, she'll likely be renting an apartment and living on her own (no roommates or university housing).

Here are a some questions that I can think of:

1. Should she get Oregon state residency? Or will this be required since she lives in Oregon for >183 days?

2. Should she change her mailing address to Oregon or keep her Washington address? I'm assuming if she gets Oregon state residency, changing her address is a must.

3. Healthcare. She's currently on my policy and I need to figure out if she can maintain coverage in Oregon or if she has to get her own insurance. Personally, I'm hoping that she can stay on my policy until she's 26 so I can maintain a family HSA, but I realize that might not be an option.

4. Automobile. Does she register her vehicle in Oregon or keep Washington registration? This probably goes back to where she has residency? We also need to figure out car insurance, which might decide this question.

5. How does this affect her taxes? I'm assuming that for 2024, she'll still file as a Washington state resident because she lived there for >183 days, but what I've read so far she'll pay taxes on her Oregon income.

Those are the questions I can think of right now. Any thoughts on the above is appreciated, especially personal experience or anything I might be missing.

Thanks in advance!

* I couldn't think of a title, so I asked ChatGPT.

 

[Scrapr]

as to the car registration she will need to change it to Oregon. I "think" it is supposed to be 90 days but I think many wait until the previous state tags expire. IIRC there was a story recently that about 50% of car tags in Portland or maybe the State are expired. She will save a boatload on car registration. It's something like $300 for 3 or 4 years and not based on your cars value like in

She will need to file as a partial resident on her taxes. the people that live in Vancouver but work in Oregon hate this. But housing is cheaper in Vancouver than Portland.

https://www.oregon.gov/dor/programs/individuals/pages/what-form.aspx


I don't think you apply for Oregon residency. Either you are or you aren't

Make sure you give her a shopping list when she is returning for Holidays. No sales tax!

 

[Jimmie]

We had the same situation for our son. He's in 2nd year of PhD program at UW Seattle. Your DD will need to get guidance from the dept that is providing her annual stipend on what's best to do as it applies to becoming an OR resident. If it's best to become an OR resident, then she will need to get DL, retitle car, register to vote & file income taxes. As far as healthcare goes, my son is provided full medical & dental benefits as part of his stipend and is considered an employee of the state of WA. However, it's not required for him to use it and could have stayed on my employer provided health plan until he became 26.

 

[cathy63]

1. Should she get Oregon state residency? Or will this be required since she lives in Oregon for >183 days?

Residency is not something you "get". Each state has a set of rules that determine whether you are or are not a resident for tax purposes. You would have to look up Oregon's rules on their department of revenue website. It may not matter whether she spends more or less than 6 months, but whether she's permanently domiciled there. In some states, students from other states are considered temporary residents or transients, even if they spend the majority of their time there. I don't know the rules in Oregon, but they shouldn't be hard to find if you Google.

2. Should she change her mailing address to Oregon or keep her Washington address? I'm assuming if she gets Oregon state residency, changing her address is a must.

It generally doesn't matter unless Oregon uses it as part of determining residency. She can get mail at multiple places by giving different people/businesses different addresses.

3. Healthcare. She's currently on my policy and I need to figure out if she can maintain coverage in Oregon or if she has to get her own insurance. Personally, I'm hoping that she can stay on my policy until she's 26 so I can maintain a family HSA, but I realize that might not be an option.

She can stay on your policy even if it doesn't cover anything in Oregon. (It probably does cover emergencies though.) She can also get other coverage there. It's o.k. to be covered by two insurance plans. You do have to be careful if either of you is on an ACA plan though, because you mostly can't get ACA subsidies if you have other coverage. So, if that applies to you or her, read up on that.

Also there's a loophole in the HSA law that allows any adult who is covered by a family HDHP to fund an HSA at the family max. This is a huge advantage for young adults on their parents' plans because it allows them to put $8300 away this year to grow tax free for future health expenses. You and your spouse (if you have one) still get to contribute $8300 total to your HSAs, so having your daughter on your plan doubles the amount your family can save. Anyone can contribute to anyone else's HSA, so your daughter doesn't even have to earn the money for her own HSA. If she/you didn't contribute for 2023, she/you still have until April 15 to do so.

4. Automobile. Does she register her vehicle in Oregon or keep Washington registration? This probably goes back to where she has residency? We also need to figure out car insurance, which might decide this question.

Depends on Oregon law about how long a car can be in the state without being registered. This can be different than determining residency for tax purposes. Check their department of motor vehicles website. And yes, you should also talk to your insurance agent. Usually a student who is temporarily in another state for school can keep their insurance from home, but different states can have different rules.

5. How does this affect her taxes? I'm assuming that for 2024, she'll still file as a Washington state resident because she lived there for >183 days, but what I've read so far she'll pay taxes on her Oregon income.

Typically she'd file as a part-year resident or non-resident of the state where her school is located and she'd pay tax on the money she earned in that state. Then she'd file as a resident of the state where she maintains a domicile and pay tax on any money she earned while at home (also on investment income) and the home state would give her a credit for the amount of tax she'd paid to the other state. There's no credit in this case because WA doesn't have any income tax. Also, Oregon may have their own rules for whether they consider students to be residents, and those rules could be different for grad students.

You could run this through a 2023 tax program, acting as if she had already moved last fall to see what happens, but you'd have to buy the Oregon software. Does FreeTaxUSA do state returns? Maybe that would give you some idea.

 

[pacergal]

If she is going to be at Univ of Portland, Portland State, Oregon Health Sciences University, She could live in Vancouver and commute and the majority of those questions aren't needed. It can be a long commute sometimes, though.

Can she get some answers from the Grad program? I would think they would be very helpful in answering questions, especially for non residents coming into their program.
I believe students do not need residency, but in some instances it could be beneficial, (thinking in terms of in state tuition, maybe). But it sounds like she is earning income also, so her tuition might be taken care of.

Congratulations to your daughter on her acceptance to her program!

 

[OldShooter]

Most of these questions have been asked many times as students come and go. She should talk to people at the school; they will have answers.

You didn't ask, but I will observe that this is the beginning of her leaving the nest. She should be the one asking and finding answers to most of your questions. WADR you do her no favors by trying to "helicopter" her.

 

[SecondAttempt]

From the University of Oregon website:

"To qualify as an Oregon resident (for tuition purposes), one must live in Oregon for 12 consecutive months while taking eight credits or fewer per term while demonstrating that they are in the state for a primary purpose other than education (such as working, volunteering, or other purposes)."

So, if she is there only for college she will not be an Oregon resident. She would have to live there a full year for a purpose other than college to become a resident. She likely will owe income taxes on her Oregon income but would file as a nonresident.

Getting an Oregon driver's license will likely invalidate her Washington license. This may be bad because and Oregon license cannot be used to board an airplane or enter a federal facility, depending on her field of study this could include labs she may need access to. She would probably need to get a passport.

https://www.oregon.gov/odot/dmv/pages/driverid/residency.aspx

That link discusses vehicle registration. It does not appear she will be allowed to register a vehicle in Oregon as a student. She would need to be an Oregon resident and obtain an Oregon title. That could be a problem if there is a lien on the vehicle.

Frankly, I'm also in the camp of getting her to research this herself. There is nothing wrong with giving parental advice but she is a grown woman in graduate school. She needs to take care of herself and solve her own problems while knowing you have her back if she needs it. Without knowing her but judging from your thoughtful posts here over the years, I have no doubt that you have raised her to be fully capable of tackling these bureaucratic challenges while you watch proudly from the sidelines.

 

[SecondAttempt]

As an aside, I had a close association with the University of Arizona for over 30 years (student, grad student, employee) and I would offer several cautions:

1. University employees do not necessarily know the correct answers to things like this! So I would not necessarily trust what her "department" tells her.

2. Students are different. Many laws do not apply to them in the same way they do to others. Out of state students in Oregon, like Arizona, cannot register their car there. But not all cops know this. If I had a dollar for every time I heard of a student getting stopped for having out of state plates in Arizona...

3. At many universities students can get a university post office box. This is convenient so they do not have to change their address every time they move.

4. This stuff is complicated and not consistent even in official government sources. Oregon Department of Revenue says she will be a resident if she is there more than 200 days. The University of Oregon cites statutes that contradict this for students. Don't expect accurate and consistent answers from anyone.

 

[Gumby]

Regarding health insurance, I recall that when I went to law school I was required to sign up for insurance through the school (it was fairly cheap). She should probably ask the school.

I found this about University of Oregon Health Insurance. I seems inexpensive. Can't tell if it is required by the school.

https://health.uoregon.edu/domestic-student-plan

 

[youbet]

Many seem to be confusing the difference between the university considering you to be a resident for purposes of tuition and the state considering you a resident for purposes of taxes, car registration, etc. Two different things.

 

[tulak]

For those that suggest she needs to own figuring this out, I fully agree. I realize my original post may come across that I'm trying to solve these problems for her. Not at all. She's smart and is already figuring stuff out on her own, but there are aspects that affect me or where she is dependent on me figuring it out (mostly around insurance). And she does ask me questions. As we do with good friends that ask, we try to share knowledge as appropriate. That's why it's good to have a group of people you can ask to see what they say (kudos to ER forum).

Plus, having never been through moving from one state to another, it made me curious as to what's involved.

She can stay on your policy even if it doesn't cover anything in Oregon. (It probably does cover emergencies though.) She can also get other coverage there. It's o.k. to be covered by two insurance plans. You do have to be careful if either of you is on an ACA plan though, because you mostly can't get ACA subsidies if you have other coverage. So, if that applies to you or her, read up on that.

Also there's a loophole in the HSA law that allows any adult who is covered by a family HDHP to fund an HSA at the family max. This is a huge advantage for young adults on their parents' plans because it allows them to put $8300 away this year to grow tax free for future health expenses. You and your spouse (if you have one) still get to contribute $8300 total to your HSAs, so having your daughter on your plan doubles the amount your family can save. Anyone can contribute to anyone else's HSA, so your daughter doesn't even have to earn the money for her own HSA. If she/you didn't contribute for 2023, she/you still have until April 15 to do so.

There's another aspect to this which you hint at. I'm single, but since I have a family HDHP, I'm able to contribute $8300. This helps me quite a bit with taxes and since DD is the youngest, I would like to keep her on my policy until she is 26.

I've been trying to encourage DS to take advantage of the loophole you mention, but he's been hesitant so far. He'll be working on his taxes soon and I already told him to run the numbers with and without contributing to an HSA. I'm confident that will convince him to contribute to an HSA. We'll see how that goes.

For DD, it's not as easy since she has less money to work with. She's been prioritizing investing in her Roth IRA and is happy when she can contribute the max.

As for coverage, it looks like my policy does provide coverage in Oregon. But it never occurred to me that she could have both. None of us are dealing with ACA, so no worries there.

Typically she'd file as a part-year resident or non-resident of the state where her school is located and she'd pay tax on the money she earned in that state. Then she'd file as a resident of the state where she maintains a domicile and pay tax on any money she earned while at home (also on investment income) and the home state would give her a credit for the amount of tax she'd paid to the other state. There's no credit in this case because WA doesn't have any income tax. Also, Oregon may have their own rules for whether they consider students to be residents, and those rules could be different for grad students.

You could run this through a 2023 tax program, acting as if she had already moved last fall to see what happens, but you'd have to buy the Oregon software. Does FreeTaxUSA do state returns? Maybe that would give you some idea.

That's a good idea. I have TT Premier, which includes state. I'll try and model this out and see what happens.

Congratulations to your daughter on her acceptance to her program!

Thank you! I'm very happy for her.

4. This stuff is complicated and not consistent even in official government sources. Oregon Department of Revenue says she will be a resident if she is there more than 200 days. The University of Oregon cites statutes that contradict this for students. Don't expect accurate and consistent answers from anyone.

I'm beginning to think it doesn't really matter. The state will get their tax money. I'm going to try Cathy's suggestion of modeling this in TT and see what it says. Otherwise, I suspect most of this will naturally solve itself.

Regarding health insurance, I recall that when I went to law school I was required to sign up for insurance through the school (it was fairly cheap). She should probably ask the school.

I found this about University of Oregon Health Insurance. It seems inexpensive. Can't tell if it is required by the school.

https://health.uoregon.edu/domestic-student-plan

The plan you're referring to is for regular students. As a working graduate student, she has a plan that is negotiated by their union. The insurance plan she is offered is dirt cheap. She has to pay 5% of the cost when working and 20% of cost over summer if she's not working. If she's working, it's about $65/month with a $100 deductible, with a lot of basic services fully covered if she uses the university health center. If she consumes any health care services, it could be that this plan is cheaper than my HDHP plan.

In the long-term, this is good because eventually she'll have to sign up for the university offered plan.

Many seem to be confusing the difference between the university considering you to be a resident for purposes of tuition and the state considering you a resident for purposes of taxes, car registration, etc. Two different things.

Agree. She is will be a part-time employee for the university and her education is fully funded, minus a nominal amount for fees. This is not the regular going off to college to get your degree and dealing with resident/non-resident tuition. She's still a student, but she's also an employee. I advise her to treat this more as moving out of state for a job and not thinking of it as going off to school. This resonates with her, because she's done the latter and her college (undergrad) days are over.

Thanks everyone for the responses. It's been helpful.

 

[SecondAttempt]

Plus, having never been through moving from one state to another, it made me curious as to what's involved.

I moved from Arizona to Hawaii about 10 years ago. It was not complicated at all but it can be very inconsistent. There are all kinds of assumptions made by government that just simply are not true. For example, Hawaii does not issue you a new driver's license until your prior state license expires. My Arizona license expires when I turn 65 which was over 17 years in the future. I still get asked sometimes why I have an Arizona license if I am a Hawaii resident. And I am constantly concerned Arizona will cancel my license and not tell me. They have pulled stunts like that in the past when, for example, the law did not allow the DMV to expire licenses early, they expired the PICTURE so you had to get a new license to update the picture. This was after 9/11.

Taxes were actually pretty straight forward but that might be because we had been filing in both states for years because we had a rental property in Hawaii. I think the first year was weird because my ex-wife had stayed in Arizona until she could retire so she was an Arizona resident while I was Hawaii.

And of course there are all sorts of cultural things to adapt to like here people actually pull over and stop for emergency vehicles. And Hawaii is a deep blue state while Arizona was very red at the time...just sayin'.

I don't think she will encounter much culture shock going from Washington to Oregon.

 

[SecondAttempt]

There's another aspect to this which you hint at. I'm single, but since I have a family HDHP, I'm able to contribute $8300. This helps me quite a bit with taxes and since DD is the youngest, I would like to keep her on my policy until she is 26.

Imagine how proud you will be when she says "Dad, if you are saving on taxes, shouldn't you pay me half of that?