topic Full Time or Part Time Residency in MD in State tax filing

Full Time or Part Time Residency in MD

thwu2019 — Sat, 20 Mar 2021 17:12:42 GMT

Hi all. I am running into a road block here for 2020 federal and state taxes for MD. Ran through federal taxes no problem with filing jointly married, but state is what I am having issues with.

I was a full time MD resident in 2020 but my wife is a part time MD residency previously Texas. Turbo tax did not give me an option to choose individual residency for each of us. How do I proceed with this? I can see form 502 in Turbotax forms as I fill it out, but the turbotax software does not allow me to specify that I was a full time resident but my wife is only a part time.

How do I combat this? Let me know if you need extra information to help.

Re: Full Time or Part Time Residency in MD

KathrynG3 — Sat, 20 Mar 2021 17:56:00 GMT

Address your wife's residency in the My Info section form the left menu.

Scroll down and click the pencil icon to Edit your wife's information.
Identify where she lived December 31, 2020 and
Answer Yes to My spouse lived in another state in 2020.
Identify Texas as her Previous state of residence (where your spouse lived before moving).

Since Texas does not have a state tax, you only need to file Maryland.

However, by starting with these details in the My Info section, then Maryland will have the dates entered from My Info prepopulated.
Answer as if you both were part-year residents.
The income allocation will be captured when you get to the allocation screens.
Only back out her portion of the income during the interview.

You both must use the 2020 Resident Form 502 for Maryland. She would only be allowed a credit for the income received during the part of the year when she was not a resident of Maryland. (see page 26 for more details).

Re: Full Time or Part Time Residency in MD

thwu2019 — Sat, 20 Mar 2021 18:56:32 GMT

Thank you Kathryn.

I read in form 502 instructions that:

"Married taxpayers with different tax periods filing a joint Maryland return should enter a “D” in the box, follow the remainder of this instruction and write “different tax periods” in the dates of residence area."

TurboTax filled in a "P" in for me. Will that present a problem?

Re: Full Time or Part Time Residency in MD

KathrynG3 — Sat, 20 Mar 2021 20:41:31 GMT

I think it would be helpful to have a TurboTax ".tax2020" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions:

For TurboTax Online:

From the left menu, click Tax Tools.
Tools.
Share my file with agent click Send.
There will be a pop-up with a token number.

For TurboTax Desktop:

On your menu bar at the very top, click "Online"
Send Tax File to Agent click Send.
The pop-up will have a token number.

I'll be able to open TurboTax with your numbers but not your personal information. That may help diagnose the issue.

@thwu2019

Re: Full Time or Part Time Residency in MD

thwu2019 — Sat, 20 Mar 2021 21:13:13 GMT

My number is 790988.

Re: Full Time or Part Time Residency in MD

KathrynG3 — Sun, 21 Mar 2021 19:44:24 GMT

Thank you for the Token Number. I looked over your return and analyzed this alternative. You will pay the minimum tax to file Maryland as Married Filing Jointly and you are allowed to choose the filing status to your advantage.

According to page 10 of the Maryland 2020 Resident Booklet, it states: If you are not certain which filing status to use, figure your tax both ways to determine which status is best for you. See Instructions 8 and 26(g) through (p).

You are correct that the preference would be entering D, but TurboTax Online does not split the state returns to married filing separately instead of married filing jointly.

If you did want to file the state separately, you would need to switch to TurboTax CD/Download, prepare a "mock" Married Filing Separate federal return, and prepare two state returns as married filing separate. This would allow the D to be entered for you and the P to be entered for your spouse. How do I switch from TurboTax Online to the TurboTax software?

@thwu2019

Re: Full Time or Part Time Residency in MD

thwu2019 — Sun, 21 Mar 2021 20:09:09 GMT

@KathrynG3 Thank you for your thorough reply, Kathryn. I am already using TurboTax on the downloaded software on my desktop. If I continue to file the state taxes as married filing jointly and keep the "P" in that box, will that present any challenges or push-back in the future from the IRS or Maryland's tax department? If it will not present any problems, I will go ahead and just file it this way as part-time residents jointly to save time in filling out the tax forms again & saving money on multiple state returns.

Re: Full Time or Part Time Residency in MD

KathrynG3 — Sun, 21 Mar 2021 20:26:18 GMT

You're welcome. I did an override to D and there was no tax change. Therefore, I do not believe there would be any problems.

Re: Full Time or Part Time Residency in MD

thwu2019 — Sun, 21 Mar 2021 20:35:05 GMT

Great. Thank you for all your help throughout this! Have a great Sunday!