Whether it’s legal to file separate state returns if you file a joint federal return depends on your states.
States have different rules, but most states allow you to file separate state returns if one spouse is a nonresident.
Arizona and Pennsylvania both allow taxpayers to choose their filing status.
The profit from the sale of the AZ property would be split on both returns since it was jointly owned.
Since the sale is taxed by both states, your would have to file two separate AZ returns if you file separate. Filing a joint AZ return may be better here.
The PA house is probably only on the PA return. AZ is a community property state, but a PA house would generally be separate property. You can claim a credit on the PA return for tax paid to AZ for half the property.
See Income Tax Issues Affecting Married and Divorced Taxpayers
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
