topic Accounting for California Tax Refund from previous year in State tax filing

Accounting for California Tax Refund from previous year

Fgarza2146 — Sat, 08 Feb 2025 15:58:53 GMT

My wife and I filed jointly last year, and this year we will file separately.

How do I account for California’s tax Refund from last year? Do we split it and manually enter half the refund on our return?

Re: Accounting for California Tax Refund from previous year

MonikaK1 — Sat, 08 Feb 2025 17:56:50 GMT

Yes, you would split the refund if it was community income. California is a community property state. When filing a separate return, each spouse/RDP reports the following:

One-half of the community income
All of their own separate income

Community property rules apply to the division of income if you use the married/RDP filing separately status.

If you’re married/registered domestic partner (RDP), you may choose to file separately. Each spouse or partner will prepare a separate tax return and report their individual income and deductions.

Tax rates are higher for the married/RDP filing separately filing status
If one person files itemized, the other spouse/RDP must file itemized as well
Generally, you do not qualify for Earned Income Tax Credit (EITC) or Child and dependent care credit. Check the CALEITC eligibility page for more information.
Standardized deduction is reduced (1/2 of married/RDP filing jointly)

See this California FTB webpage and IRS Publication 555 for more information.

Re: Accounting for California Tax Refund from previous year

Fgarza2146 — Sun, 09 Feb 2025 00:15:19 GMT

@MonikaK1

So to be clear, we spilt the amount on the 1099-G in half since we both are named in it?

Re: Accounting for California Tax Refund from previous year

MindyB — Sun, 09 Feb 2025 03:07:42 GMT

Yes, that is correct. Divide the amount in half, and you will each report half. As @MonikaK1 mentioned, you both need to agree to itemize or take the Standard Deduction on your separate returns.