How to File Taxes When Your Spouse Lives in a Different State

How to File Taxes When Your Spouse Lives in a Different State

One of our readers asks a question about how to file state taxes when he lived in New York and his wife moved from Ohio to New York

In 2012 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?

The above is a (slightly modified) comment from a blog reader left on a different post. I thought it was an interesting enough topic to merit a whole post of its own.

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.

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, as in the situation above. The primary problem is that it’s impossible to determine the residency of a joint state return when each spouse is living in a different place.

The man’s situation is pretty simple. He was a resident of NY for all of 2012. 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 2012 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.

Even if the residency of the two spouses differed during the year, New York actually allows them to file a joint return if they want to. The only problem is that both of them will be treated as residents for the entire year. In this scenario, it would mean that the wife who moved from OH to NY would end up paying more to NY that should would have to if they filed separate returns.

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. But the good news is that for 2013, when hopefully they’ll both be settled in NY the whole time, they will only have to file one joint NY resident return.

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

Or, if this post has answered your questions, you can go ahead and file your state tax return(s) right here on RapidTax.

Photo via Meathead Movers on Flickr.

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This entry was posted on Thursday, March 14th, 2013 at 2:16 pm and is filed under Tax Tips.

6 Responses to “How to File Taxes When Your Spouse Lives in a Different State”

  1. Dominic says:

    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.

    • Tax Advisor says:

      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.

  2. veronica says:

    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.

  3. RT says:

    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

    • Tax Advisor says:

      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.

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