including federal tax return with state return when filing separately

[aamirin]

We are filing married jointly federally, and my spouse and I each separately in CA and AZ, our states of residence. I have followed TurboTax instructions and prepared mock federal returns to generate state returns. When I file in CA, I need to include a copy of my federal return. Should I include my real filing-jointly federal return or the mock federal return that was used to generate the CA return? The latter has entries consistent with the CA adjustments form but is not real.

[MaryK4]

You will want to include a copy of the separate return used to prepare the California return.  Are you including community income on both returns?  

[aamirin]

Virtually all the income is community income. CA requires that the federal return be included with the state return. Since the mock married-filing-separate return is not a real return, doesn't that mean I have to include the genuine married-filing-jointly return with the state return? True that most entries on the genuine federal return will be twice as large as the left column of the CA adjustments form because of the split in community income. I can see a value to also including the mock married-filing-separate return as a guide to the origin of the figures in the CA return. Thanks.

[MonikaK1]

I would recommend including a copy of the actual Federal joint return since that is what was filed, and the mock separate return was used as the basis for the separate returns.

Each state has its own rules regarding this topic. For example, Arizona allows couples to file separately even if they filed a joint federal return, whereas Colorado does not. California doesn't allow it either, with the exception of active-duty military and certain nonresidents - see below. 

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).

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.

Contact the Franchise Tax Board if you are uncertain whether separate filing is permitted in your situation.

@aamirin

[aamirin]

Any CA source income considered to be my wife's (who lives in AZ full-time) was well under the minimum filing requirements for CA, so I took that to imply that we could file separately in our states while filing jointly federally. I guess we will see how CA interprets that. My tax form has been mailed in with both the actual MFJ federal and the mock MFS federal.

[shreyasjoshi0906]

Hello, 

My spouse and I are in a similar situation. We have filed federal tax MFJ and are looking to file state tax MFS. We reside in different states (CA, AZ for my spouse) and have no income in other's state of residence. My question was regarding the Adjusted Gross Income on line 13 of the 540 CA state tax form. Here, one should input the gross income from 1040 line 11 which would be our collective income (since we filed MFJ)  or should we input the number from the mock federal tax return reflecting individual AGI? 

Many thanks for considering my request.

[KeshaH]

Typically you would enter the amount from the mock federal return. However, since you both live in a community property state, your spouse is considered to have CA income (their share of the community income that you earned in CA). Since your spouse has CA income, CA law doesn't allow you to file separately if you file jointly for federal tax purposes, even though your spouse is a nonresident. So, in your case you'd enter the amount from the jointly filed federal return since you're required to file jointly in California.

@shreyasjoshi0906 

[aamirin]

Replying to recent response: It is not necessarily true that AZ spouse is considered to have CA income. It would have to be income with a source in CA. Income from pension or interest income does not count as CA source income. If CA spouse is still working though (e.g., self-employment), then AZ spouse would have CA source income and couple would have to file jointly in CA. In any case, the whole purpose of the mock federal returns is to generate the appropriate numbers for the individual MFS state returns, so the amounts on the CA forms would be those from mock MFS CA return.