PA & NY

[lostaxes24]

Spouse 1 works & lives in PA (full time & only residence)

Spouse 2 works & lives in NY (full time & only residence)

Dependent 1 lives fully with Spouse 2 in NY and goes to school. 

Can they file MFJ for federal? How do they apply for State? What are the option (s)?

Previously Spouse 1 applied as MFS (fed & state) and Spouse 2 applied as HOH (fed & state). 

[AmyC]

1.Yes, you can file MFJ on the federal.

MFS eliminates some credits so it can be a harsh way to file.  If you have rental income, retirement funds, or kids, I would really advise you look into how much you could lose. 

PA and NY are both part of a larger state agreement, NESTOA, that understands dual domiciles. Each state taxes their portion of the earned income.

2. If you file a federal joint, you can file MFS or MFJ with both states.

If you file federal as MFS and HOH, then you would file: 

• MFS and HOH for NY 
• MFS or MFJ for PA.

References:

• PA residency status & Filing requirements.- NESTOA also here
• NY filing status prefers the same as federal but allows MFS when the one spouse did not live in the state.
• Filing HOH requires conditions be met, see What is my tax filing status (single, married, etc.)?

[lostaxes24]

Thank you for your reply. 

Would it be possible to file federal as MFJ and NY state as HoH (claiming the dependent) and PA as MFS?

How can we file MFJ for both federal and state? Does that mean each state will tax both incomes ?

[Vanessa A]

No.  You will need to either file NY MFJ or MFS and same for PA.

In nearly all cases, you must use the same filing status that you used on your federal return. If you did not have to file a federal return, use the same filing status that you would have used if you had filed. Same-sex married couples see Personal income tax information for same-sex married couples.

The only exceptions to this rule apply to married individuals who file a joint federal return and:

• one spouse is a New York State resident and the other is a nonresident or part-year resident. In this case you must either:
  • file separate New York State returns using filing status ③; or
  • file jointly, as if you both were New York State residents, using filing status ② Filing Status

If you choose to file MFJ for both states, then yes, you would pay taxes to the state for both of your income as NY has you treat each person as a resident.  However, you would be able to claim a credit for taxes paid to another state on your NY return.  Be aware, in general, NY taxes are higher than PA income flat tax rate, so you may end up paying more overall.