A married couple filing jointly, I lived in CA for the entire year and my wife lived in MN. Why does the MN taxable income include my CA income too?

[JotikaT2]

It depends.

If you are filing your California return as Married Filing Joint, her income would be included in the California return.

Since she did not reside in California and assuming she did not have any income from California sources, you do meet the exception allowing you to file separately within California.

Please see the link below for steps on how to prepare a separate return in TurboTax if you determine this applies to your particular situation.

Filing a joint return for federal but separate for state

[TomD8]

You do not meet the exception @JotikaT2 referenced.  Read the Community Property States paragraph in that reference.  CA is a community property state.

Since you resided all year in CA, your income is Community Property income per California law - resulting in your wife having CA-source income.  This means that you cannot file separately in CA unless you file separately on your federal return.

Note that CA uses a pro-rated method to determine a CA non-resident's CA tax.  See Tax Computation Method in this reference:

https://www.ftb.ca.gov/forms/misc/1100.html

[renlq112]

Thanks, but my question is that I saw my CA income is included in MN state taxable income. So I guess the new question is whether MN allows married filling separated when federal filing jointly

[TomD8]

Minnesota does not allow that.

From the Minnesota instructions for MN Form M1NR:

"If you are married and file a joint federal return, you must file a joint Minnesota return even if only one spouse is a Minnesota resident or has Minnesota income. You must include Schedule M1NR when you file your return."

https://www.revenue.state.mn.us/sites/default/files/2021-02/m1nr_20_0.pdf