Hello. Quick question. My wife has a student loan debt prior to us being married. She is a homemaker and hasn’t worked since 2008. Just recently her loan fell into default and an offset of our return will occur. I’ve e-filed with the injured spouse form and it was accepted. Given that she had no income, ca I expect the full refund or will they still garnish the refund?
Yes, if your wife does not have income, when you do the allocation on the Injured Spouse form, you can claim all the income etc. This will protect your refund. Please remember to file the form every year with your tax return to avoid delays.
But doesn't living in a community property state mean that possibly just 1/2 of the refund will be kept by the IRS? In other words, does your reply not have to be qualified vis-a-vis community vs. non-community property state?
Yes, you're correct.
If you live in a community property state that recognizes the marriage, special rules apply to the calculation of an injured spouse refund.
For information relating to the factors that determine whether you're subject to community
property laws, please see IRS Publication 555, Community Property.