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
I currently live in Alaska we have no state tax and my husband lives in Washington and also has no state tax. I may possibly be moving to California for work in January 2016 where they do have state tax. Will I be able to file “married filing separate” for the state tax for CA?
Hi Linda,
Congratulations! That should be an exciting move.
You always have the option to file a separate return from your spouse. In similar cases to yours, married filers will file a joint federal return and separate state tax returns. This provides each spouse with independent state tax responsibility but joint federal tax responsibility.
Question I have is trying to figure out the drawbacks of filing separate state tax. If we live and work in different states, I know we can file joint federal but separate state tax returns.
I am trying to figure out what are the drawbacks of filing separate state tax returns (besides time, complication and fees)?
Hello,
There are several negatives when it comes to filing separately as a married couple. The main disadvantage is that your tax rate will be higher. Along with that, some other drawbacks are that you cannot claim certain credits and if you live in the community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin) you have to deal with community property allocations and adjustments, which can add extra fees and frustration. Filing separate state tax returns can be most beneficial to some spouses’. It all depends on your tax situation.
I have a situation,I am married but we live in different states. I work and live in MA, my wife does not work and lives in FL.
From what I read above we can file jointly on our federal. What about the state tax, does she need to file a FL state return even though she has no income? Do I file a state return married filing seperately?
Hi Norm,
You and your wife can file a joint federal tax return however and you can file an MA resident state tax return with a filing status of ‘married filing separately‘. However, your wife is not required to file a state tax return for FL because they are an income-tax free state. Even if she does eventually obtain a job there and starts earning an income, she will only need to file a federal return.
My family lives in NJ and I found a job in Illinois and moved to Illinois. I visit my family on weekends.
With this said, based on your advice, I could file fed tax jointly but state tax separately. But NJ requires us to use the same filing status as Fed. So if I file NJ tax jointly, do I have to include my Illinois income on NJ tax even if I am Illinois residence with Illinois income only?
Hi Charley,
This year:
Depending on when you moved to Illinois from New Jersey, you may need to file a part-year resident state tax return for both NJ and IL. However, that instance would ONLY be for the year in which you moved from one state to the other. Part-year resident returns allow you to report your IL income on one and your NJ income on the other along with the duration that you lived in NJ and when you then moved to IL.
Future years:
If you are an Illinois resident and also earning your income in Illinois, then you would only need to file an Illinois state resident tax return (along with your federal tax return). Visiting NJ would not make you a resident and you would only be liable for NJ taxes if you are physically earning an income on your visits there.
Hi Tax Advisor,
From reading the comments, it makes sense for my husband and I to file our Federal tax return jointly, but to file our state taxes separately since we live in different states.
He lives and works in CA, I live and am retired receiving retirement benefits in AZ for 2015. My question is about severance pay I received after my retirement. Although I retired and moved to AZ, I received severance pay for 5 months from my CA employer. They did tax me at the CA withholding rate and CA OASDI/EE for the period that severance was paid. Is there something special I should do to report those withholding amounts?
My husband has decided to work through 2016, so I will move back to CA and look for work in CA since he will not ready to move to AZ until his retirement. That should solve the problem for 2016 and going forward once we both make the move to AZ together.
Hi Sandra,
Congratulations on your retirement!
You can claim the tax paid to CA incorrectly by filing a non-resident CA state tax return along with your resident state return and federal return. You will still need to file this separate from your husband since it is a non-resident return.