0 income spouse student loans in federal collection. How does it affect married partner

[Bobbye21]

My wife is a stay at home mom who takes care of our 4 children she has a huge amount of student loan debt from her double bachelors and masters degree. Her student loans are now in federal collection. Can they garnish our tax return if we file married filling jointly, when she has no income and I am the sole provider for our family? Would it be better to file married separately or head of household if our return is potentially jeopardized because of her student loans in federal collection status?

[xmasbaby0 · Accepted solution]

Yes, your refund can be seized for your spouse's delinquent student loan debts.

You cannot file Head of Household if you are married and lived together for the last six months of 2018, so forget that.  Your choices are to file married filing jointly or married filing separately.  If you file MFS you lose a lot of credits like earned income credit and education credits.  You can file a joint return and file as an injured spouse to protect part of your tax refund.  If you are in a community property state it is tricky.

Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI

INJURED SPOUSE

https://ttlc.intuit.com/questions/1910698-how-do-i-file-form-8379-injured-spouse-allocation

[Bobbye21]

We are in a community property state (AZ) does that lessen our chances. Can my wages be garnished because of her student loan default as well. Is it possible to still work out a payment plan option once it reaches this far? We just got the letter in the mail about her Loans in collection and are afraid to call with lout all the facts.

[Critter]

No they cannot garnish your income for her loans  and the injured spouse form will do some but not much for you but file it anyway.