My husband is separated military. I've had two jobs this year. One of my jobs and his military are CA, and our current jobs are both DE. Could we still use TurboTax Free?

[delaneyseal]

My husband separated in August and got a job in October, in Delaware. His state of enlistment was CA. He was in for two years. I worked at Kmart AND Home Depot until August, when I moved to Delaware and kept just my Home Depot job. With working with two different states and a military separation, I'm wondering if I can still use the free version of the program.

[DanielV01 · Accepted solution]

It depends.  You may certainly start out in TurboTax Absolute Zero, and if you do not have another tax situation that requires you to upgrade, it is possible that you may be able to file this return.  Here's what I see:

You should be able to file two part-year returns:  DE and CA.  In TurboTax, you will state that you were a resident on December 31 of DE, but you lived in another state, CA.  You will state that your husband was active-duty military, and that he separated from the military in the year.  If you don't have any complications in the Federal portion (not itemizing deductions, no self-employment or other complicated situations), then the only remaining hurdle are the state returns.  It boils down to this question:  were you a CA resident also because of MSRRA?  Your question sounds like you were. If your income was being taxed to CA until your husband separated from the military, and then you informed your employer so they began to withhold for DE instead of CA, you will in fact (likely) be able to use the free version.  You will need to prepare two part-year returns which will split your DE and CA income neatly.  (Side note:  If his active duty income was earned stationed outside of CA, it is not taxable in CA).

It could be a bit more  complicated, however, if your state of residence was not California because MSRRA does not apply to you.  This would be the case if you were not a California resident when you married your husband and never established California residency for yourself.  If this is the case, then the big question will be if you were stationed in Delaware for the entire year before he was separated from the military.  This FAQ on Military Spouse Rules can be a big help for you:  https://ttlc.intuit.com/replies/3302300

If you were not a CA resident yourself, feel free to comment your situation so that I can provide additional guidance.

[delaneyseal]

I was a CA resident actually, my entire life up until August. That had nothing to do with the military situation. My husband and I both were born and raised in CA, so that's why he was enlisted there. I moved to DE in August because he was based out here. He ended up separating in September. We weren't married until November (so I was never an actual military dependent.) When I moved to DE in August, I left one of my jobs, and transferred my OTHER job from CA to DE, so I still work for that same company in DE. Post-separation, my husband got a job (in about October) at the same company I work for in DE.

[DanielV01]

You're right that MSRRA does not apply, but it's still the same tax treatment.  You both are part-year residents of California and Delaware.  His military income is not taxed in CA because he was stationed in DE and not in DE because his CA residency protects him from being taxed there.  In September, he became a Delaware resident.  Your most advantageous Federal filing status is Mariied Filing Joint, for California it will be Married Filing Joint, and for Delaware I believe they allow you to file Married filing Separate on a Combined return.  If this is so for a part-year return, they may allow you to enter separate move-in dates for Delaware.  If they don't, use your husband's military separation date as the official one.  The situation looks like it is complicated, but it actually isn't.

[delaneyseal]

Thank you very much! So if I use the Free Version of TurboTax, will that walk me through the entire thing? Like, will I be able to do all of that and understand what I'm doing? I'm looking to work on this all day tomorrow.

[DanielV01]

I apologize but I was off.  Two part-year returns can be done in TurboTax Absolute Zero, and, yes, the program will walk you through everything.  Of course, you may post questions if you do run into something you're unsure of.  Just remember we can't see your screen, so make sure you describe it well.

[delaneyseal]

We did it yesterday and almost everything worked, but it IS rejecting my husband's AGI from 2016. But otherwise it went smoothly.