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,
Married filing jointly, but have been separated for 8 years. He lives in another state and makes no money. Do we need to file in both states?
Hi Joy,
If you want to file jointly, I suggest filing a joint federal tax return and separate state tax returns. This will allow you both to hold responsibility for your own state taxes while still being able to reap the tax benefits of filing a joint tax return.
We are married last year March 2015 and we were living separate. I am a resident of WA state and working here. On the other hand, my wife is the resident of NJ state and she worked part time for 3 months before she got married. She is a full time student and I bear all of her expenses. I understand from reading the prior posts that we can still file jointly on Federal returns and she can file separately for her state return. I would like to know if I have to file “Married but separate NJ state” return as WA state don’t have state income. Please suggest.
Hi Neil,
You will not need to file a state tax return since you are living and working in Washington and your wife is filing as married filing separately for her NJ state tax return.
If I live in Florida and become a Florida resident but earn income from a vacation rental property in NY state, do I file a NYS tax return? I know Fla does not have income tax. I also work online from home for a NYS business – how do I report that income if I change to a fla resident? (I’m currently a NYS resident but am thinking of changing to Fla). My husband will remain a NYS resident.
Hi Karen,
Rental income is taxable, therefore, you will be responsible for filing a NYS tax return and reporting that rental income earned on it. Just a reminder- make sure you look into the many deductions and possible credits for your rental home. This could help you a considerable amount when the IRS determines what you owe in taxes for the year.
You will not need to report your online work income earned on your NYS tax return unless your employer is withholding from NY (in which case you would report 0 income earned in NY and the amount withheld from NY, resulting in a refund). Your online job that you work for remotely earns you income from FL (which is income tax-free).
Since your husband is a NYS resident and you are planning to be a FL resident, it would benefit you both to file a joint federal tax return but separate state tax returns. If your husband could claim the rental income instead of you claiming it as a FL resident, your tax situation would benefit even further. This will most likely depend whose name is on the mortgage, etc.
The home in NYS is our residence so there is no NYS sales tax since it is considered “real property”. There is no mortgage on the property but my husband is retired and on social security now, so I am not sure if the rental income would classify as income (according to social security laws) if he were to claim it rather than me? I am aware of the many deductions available to offset the income. I’ll have to look into the possible credits available.
I am married, but I been separated for 4 and half years. How should I file?
Hi Danielle,
The IRS honors the divorce laws of whichever state you reside in. For example, in some states, you remain married from a tax standpoint until your divorce is final, even though you’re legally separated. Just double check with your state laws. If you are considered to be married if you are legally separated, then you can only choose either married filing joint or married filing separately. If you are legally separated and considered to be single according to your state, then you can file as single or head of household (if eligible).
We are married and residents of South Dakota (no state taxes). I (wife) am considering becoming a California resident but will have minimal or no income. I understand from reading the prior posts that we can still file jointly on Federal returns, and husband will have no tax return to file for South Dakota. Will any of his income be reported on my California return if I file separately? What about deductions reported on the federal return? Would any of these need to be reported on the state return? In other words, what, if anything, carries over from the joint federal return to my MFS California return, especially if I have no income.
Hi Mindy,
If you file separate state tax returns, then your husband’s income will not have an effect on you (state-wise). However, if you file a joint federal tax return, then the income reported on that applies to both you and your spouse. You will both be responsible for any tax due federally to the IRS (if any).