California state income non resident file jointly or separately

[chunkt]

Scenario:

I got married in Sep 2024. My wife worked in California from April 2024 to May 2024 and had income from the state. Before that she was in Illinois but had no income. After May, she moved to Tennessee and is working from there since. I was a Massachusetts resident all year and had no income from California.

We're filing a joint Federal tax return because it gives us the maximum refund. We cannot file state tax jointly for MA since both of us were not residents. 

For CA, we can file separately only if one (or both) was non-resident and had no income from "California sources". According to the instructions here.

" If either spouse earned California source income while domiciled in a community property state, the community income will be split equally between the spouses. Both spouses will have California source income and they will not qualify for the nonresident spouse exception."

So its a bit confusing since we were not married when she was in CA and considering the final domicile of both of us during the year, none of us were in a community property state. Or do we consider domicile as CA because that's where she was when the she earned the income? 

[MaryK4]

Because you were not married when your wife earned the California income, it is not community income so she can file the California nonresident return as separate and you do not have to file California.  

[chunkt]

@MaryK4 

Thanks for the answer.

Does California consider us married for the whole year like IRS even when we were not married at the time of my wife having income from the state of California?

[MaryK4]

Yes, California (and the IRS) looks at your marital status on December 31st regardless of when you were married and applies it t the entire year.  You are able to sort and classify the income through the year.  It would be easier (and possible) to use the dates (because you do have to enter them and they are reported on the CA tax return), but they do not allow this currently.  @kanishkt 

[chunkt]

So is it advisable to file jointly or separately for California?

If filling jointly,does that affect my MA state income because of community property income from California?

[MonikaK1]

If you file jointly for California, you won't need to allocate community property. Massachusetts is not among the nine community property states so the issue doesn't apply there. When you live in a community property state and file separate returns, you each must report 50 percent of your spouse's income and half of income generated by community assets, plus all of your separate income. 

Please see this TurboTax tips article for more information.

The California Franchise Tax Board's Form 540 Instructions state the following on this topic:

Use the same filing status for California that you used for your federal income tax return, unless you are an RDP (Registered Domestic Partnership). If you are an RDP and file single for federal, you must file married/RDP filing jointly or married/RDP filing separately for California. If you are an RDP and file head of household for federal purposes, you may file head of household for California purposes only if you meet the requirements to be considered unmarried or considered not in a domestic partnership.

Exception: If you file a joint tax return for federal purposes, you may file separately for California if either spouse was either of the following:

• An active member of the United States armed forces or any auxiliary military branch during 2024.
• A nonresident for the entire year and had no income from California sources during 2024.

Community Property States: If the spouse earning the California source income is domiciled in a community property state, community income will be split equally between the spouses. Both spouses will have California source income and they will not qualify for the nonresident spouse exception.

The Massachusetts tax agency states that, for tax years beginning on or after January 1, 2024, married couples must file a joint Massachusetts return if they filed a joint federal income tax return, unless one of the spouses wasn't required to file a Massachusetts return because their Massachusetts gross income was $8,000 or less.

Yes, TurboTax can handle joint Federal and separate State returns. It's best done using a Desktop version. See this help article for step-by-step instructions.