If your spouse moved from a different state, you might be unsure how to file your state taxes.
“In 2013 I was a full-year resident of New York State and got a W-2 in NY. However, my wife was a part-year resident of NY (the other state being Ohio) and got two W-2s, one from NY and one from OH. So for our NY State return are we full-year residents or not?”
You may find yourself in a situation like the example above. If so, the first important thing all married couples should note before they try to deal with a complicated state tax situation is that they can actually file separate state tax returns, even if they file a joint federal return.
Filing Jointly vs. Filing Separately
Most married couples will opt to file their federal taxes together, using the married filing jointly filing status, because it provides the greatest benefit. It’s only advantageous to use the married filing separately status in very limited situations.
Even though it makes sense to file a joint federal return, if your state situation is complicated enough, it may make sense to file separate state returns.
Take the example listed above; the man’s situation is pretty simple- he was a resident of NY for all of 2013. It’s pretty clear that he has to file a NY resident return. This will tax him on all of his income for the entire year, no matter where it was earned.
His wife’s situation is more complex because halfway through the year she moved from OH to NY. This means that she needs to file an OH part-year resident return and then a NY part-year resident return.
Her OH part-year resident return will tax her on all of her income (no matter where it was earned) for that portion of the year that she was a permanent resident of OH. Her NY part-year resident return will tax her on all of her income (no matter where it was earned) for the portion of the year that she was a permanent resident of NY.
Some taxpayers may opt to go ahead and file a joint return even though one spouse was a part-year resident. It’s certainly more convenient, and if you moved early in the year, it probably won’t end up making that much of a difference. Plus it could actually end up saving you money on tax preparation fees.
Phew! That’s a lot of state tax information for one couple.
For more information about the supremely complicated world of state taxes, check out some of our other blog posts:
State Income Tax: Living in One State, Working in Another
Filing Taxes in Two Different States – What You Need to Know
Photo via Graham Fletcher on Flickr
Hi
I married in June of 2014. My husband and I both live and work in different states. He lives in NC, works there and owns property and I live, work and own property in NY. I’m afraid not to file joint because of consequences that may arise by not doing so. The matter is so complicated that I believe it is best to file separate returns. I will not permanently reside in the state of NC; until my NY employer has an opening. Is filing separate the best option?
Hi Denise,
I suggest filing jointly for the federal return and separately on your state returns.
Hi,
I just got a letter in the mail saying I owed more money to the state of Ohio and I did my taxes incorrectly.
My fiance lived in NY while she made her income, she moved to Ohio in August of 2012 when we got married, but had no income in Ohio. I filed our federal taxes married filing jointly and I filed our state taxes married filing seperately for me and my wife; my income for Ohio and her income for NY. When I called to explain the situation, they said I need to include her income on my Ohio tax so the adjusted gross income for Ohio matched that for federal and then include a schedule d.
When doing this it turns out I’m being taxed more in Ohio than before when I filed separately, and on income that my wife earned in NY.
Is it true when you file jointly on your federal tax and seperately in your state tax, that these tax forms should have the same adjusted gross income?
Hi Mike,
It is correct that your federal AGI must match your state AGI. If married filing separately on a state return, depending on Ohio’s allocation worksheet, the state AGI may be lower. However, each spouse’s income must be reported on each return since you both are still filing as married (as opposed to single).
Hi,
I’m new to the process. Any help would be appreciated. My husband has been working in WA state for the whole year. I worked in WA for the first half of the year and I’ve currently moved to CA. Now what would be the best way to fill out my W4 with current employer (me not paying CA taxes for first half of the year + my husband not paying any of the CA taxes)? Should I file tax jointly (i.e., ‘married’ or ‘married filing separately’)? If I file taxes jointly, does my husband has to pay any of the CA state tax? (he is resident of WA state).
Thanks, RT
Hi RT,
I suggest filing your federal tax return jointly with your husband. When it comes to filing state returns, you will file a part-year resident state return for CA. You would typically file another one for Washington but they do not have income tax. On this state return, you can report how many months you have lived in each state.
As a general rule, you have to file a resident tax return in the state where you lived, a part-year resident return in any state you moved to/from, and a nonresident return in a state where you earned money but didn’t live.
Filing a joint federal return and separate state returns will not have an effect on your husband paying CA state tax.
Hi I have a question. Ok I’m married but been separated for 7 years I live in Georgia and my husband lives in Oklahoma can my husband file taxes on me without my information? On my W2 I filed single but when I called about my tax return they said it has that I filed married but I have my W2 with me and it has single on it. There saying I won’t get a tax return back because on their paperwork it says married. What should I do? They never sent me a letter or called saying this information till I called wondering why I haven’t received my return.
Hi Veronica,
I suggest contacting the IRS again and speaking to a different representative that can help.
Also, consider taking a look at the IRS webpage that instructs you how to report suspected tax fraud activity. There should be documents to fill out that correspond with your specific situation.
This situation is similar to what I am experiencing. My wife lived and worked in NYC all of 2012. I lived and worked in MD for one month and then lived and worked in NYC for 11 months. I have already filed in MD as a part-time resident. For NYS, though, I am a bit confused. I have filled out a resident return for my wife and a part-time resident return for myself (including a part-time NYC resident worksheet for myself). Do we file jointly as we did for our Federal return or do we each file separately? Does this affect our standard deduction? It seems like the two forms we filled out (IT-201 and IT-203) should be filed separately.
Hi Dominic,
I found the answer to your question buried in the Instructions for Form IT-203 under the heading “Joint filing exception for some married taxpayers.” Here’s what it says: “If you are married and filing a joint federal income tax return but one spouse is a New York State resident and the other is a nonresident or part-year resident, you are required to file separate New York State returns. The resident must use Form IT-201, Resident Income Tax Return. The nonresident or part-year resident, if required to file a New York State return, must use Form IT-203. However, if you both choose to file a joint New York State return, use Form IT-201 and both spouses’ income will be taxed as full-year residents of New York State.” You can find it here on page 6: http://www.tax.ny.gov/pdf/2012/inc/it203i_2012.pdf.
Basically, what you are planning on doing is correct (filing Forms IT-201 and IT-203 separately). However, if you want to make your lives simpler you could just file a joint resident return. This would probably (though not definitely) mean that you end up paying a little more in taxes to NYS, but because you were a NY resident for eleven months anyway, it probably won’t be that much more. Both options would be correct, it just comes down to how much you value convenience vs. a little extra money spent. On the upside, it would probably lower your tax preparation costs, so financially it might even make sense to do it.
As for the standard deduction, it depends on your filing status anyway. So if you did choose to file separate NY returns, you would basically just pretend that you had filed separate federal returns. According to those same instructions, “If you file a joint federal return but must file a separate return for New York State, calculate the Federal amount column as if you had filed a separate federal return.” So this means you would each take the standard deduction for married filing separately which for 2012 amounts to $5,950 each.