Returns in a University Community
Personal returns in Vermillion often include income that does not fit neatly on a W-2: a faculty member's book royalties, a graduate assistant's tuition waiver, a postdoctoral fellowship, a rental house near campus or consulting for a company in another state. South Dakota has no income tax, but federal rules for education and research income are detailed, and residents of Nebraska and other states may still owe at home. BOMCAS prepares personal returns for Vermillion households remotely.
Our state personal tax page covers residency and the federal basics, and this page turns to faculty, graduate students, international scholars and landlords in Vermillion.
Faculty and Staff
University employees take part in the South Dakota Retirement System and may contribute to a 403(b) or 457 plan, both of which reduce taxable wages. Faculty with summer teaching, grants paid as salary, consulting fees, honoraria and royalties report each correctly, with expenses for self-employment income on Schedule C. Unreimbursed employee expenses are no longer deductible for university employees, so faculty who also consult should keep consulting costs separate.
Graduate Assistants and Fellows
Tuition waivers for graduate assistants are generally tax-free when the student is not paid for teaching or research in exchange for the waiver, though there are exceptions. Stipends for teaching or research are taxable wages. Fellowship payments that are not wages may come with no W-2 and no withholding, so fellows may need to make estimated payments. Scholarships used for room and board are taxable.
Students and Their Parents
Students working part-time in Vermillion may be due a refund of withheld tax. Parents claiming a USD student as a dependant can usually claim the American opportunity credit for the first four years of college, worth up to $2,500 a year, using Form 1098-T and records of tuition and books. Graduate and law students and anyone beyond the first four years may use the lifetime learning credit instead.
International Students and Scholars
International students on F-1 visas and scholars on J-1 visas are usually nonresidents for tax purposes during their first years. They file Form 1040-NR if they have income and Form 8843 even if they have none. Tax treaties with some countries exempt part of scholarships or wages. We prepare these returns and help scholars understand when they will become residents for tax purposes.
Landlords
Faculty and local families who rent houses to students report rent and expenses on Schedule E. Depreciation, repairs, utilities paid for tenants, security deposits kept for damage and the passive loss rules all need attention. Renting a room in your own home to a student also generally creates rental income.
Nebraska and Other States
A Vermillion employee who lives across the river in Nebraska files a Nebraska resident return reporting all wages. A South Dakota resident who consults for clients in another state may owe that state tax if the work is performed there. Faculty who moved from a state with income tax should file a part-year return there for the year of the move.
Retirees
Retired professors and staff often stay in Vermillion. South Dakota does not tax pensions, Social Security or retirement withdrawals, but federal tax still applies. Required minimum distributions, qualified charitable distributions and Social Security taxation can be planned.
What to Bring
- W-2s, 1099s and Form 1098-T.
- Grant, fellowship and stipend letters.
- Rental income and expense records.
- Visa documents and passport dates for international scholars.
- Last year's returns.
Law and Medical Students
Law students and medical students with clerkships, summer associate jobs or residency interviews may have wages in several states. Each state's return depends on where the work was done, and student loan interest of up to $2,500 may be deductible once income starts.
Vermillion Personal Tax Preparation Questions
Is my graduate tuition waiver taxable?
Usually not, unless it is payment for services. Stipends for teaching or research are taxable.
Do I need to file if I am an international student with no income?
Yes, Form 8843 is generally required for F-1 and J-1 visa holders even without income.
Can I claim my USD student's tuition?
Usually through the American opportunity credit for the first four years, or the lifetime learning credit after that.
I live in Nebraska and work in Vermillion. Where do I file?
Nebraska, as a resident, reporting all your wages. South Dakota has no income tax.
Talk to BOMCAS About Personal Tax Preparation in Vermillion
Owners need business returns and books finished first. A household employee goes through payroll, nightly rentals on game weekends raise lodging tax, retirement and college savings belong in planning, missed years in late filing, and scholars from abroad should read cross-border tax. Statewide, we also publish South Dakota pages on business taxes, sales and use tax, bookkeeping, payroll, planning, back taxes and cross-border tax, all reachable from the state overview.
Write to BOMCAS about your Vermillion business or household and we will reply with next steps and what we need for a quote. Use the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. You can find every Vermillion service on the Vermillion overview. This page is general information, not advice for your situation.