Married couple with one person moving to another state mid-year

[Zvezda73]

Asking for a family member:  this married  couple owns a home in Maryland and have always filed jointly as Maryland residents. In Sept 2022, due to medical issues, one of them moved to independent living in California and the spouse still (currently) resides in their shared owned home in Maryland. The one who is in independent living pays rent in California and still pays the mortgage in Maryland (this one's income is much higher due to more than one retirement pension & social security - the other spouse would not technically cover mortgage with their SS income) Both are retired and only have retirement income (SS retirement, military retirement & federal employee retirement - not sure if the specifics matters?). Taxes were only withheld for Maryland for both people for 2022. Can they file 2022 taxes jointly as just Maryland residents, or must they file separate taxes and have the one in CA say they became a CA resident in September, even though they still own a home in MD? Thanks!

[ThomasM125]

If the move by the spouse to California is temporary, then that individual could still file as a resident of Maryland and wouldn't need to file a California return.  Otherwise, that individual would need to file as a part-year resident of California and the same for Maryland. In that case, they would likely have to file married-separate federal returns to make the state filings less complicated.

[hbl3973]

Zvezda73,

A good place to start digging into this is

https://www.marylandtaxes.gov/forms/Tax_Publications/Administrative_Releases/Income_and_Estate_Tax_R...

which says:

           An individual may also be a resident of
           Maryland, even though not domiciled in this State,
           if the individual maintains a place of abode in this
           State for more than six months of the taxable year
           and is physically present for 183 days or more
           during the taxable year.

which, as the relocation to CA senior living was in September and the home is still owned and used in Maryland, at least leans towards allowing for joint filing in Maryland.  This is also supported by the Maryland income tax booklet  https://www.marylandtaxes.gov/forms/current_forms/resident_booklet.pdf  instructions:

          You are a resident of Maryland if:
          a. Your permanent home is or was in Maryland (the law refers to this as your domicile).
          OR
          b. Your permanent home is outside of Maryland, but you maintained a place of abode (a place to live)

               in Maryland for more than six months of the tax year. If this applies to you and you were physically

               present in the state for 183 days or more, you must file a full-year resident return.

Looking also at page 4 of that booklet, there is a filing status table which shows details for married filing  options.

With respect to California, and assuming the senior living is the person's new permanent or indefinite period of domicile, it would be appropriate to file a 540NR return with that state.  It can be filed either jointly or as just one married filing separately for the person in California.  See 

https://www.ftb.ca.gov/forms/2022/2022-540nr-booklet.html

for more information on the California part year resident return.  Note that the state tax imposed by California will lead to a credit against the joint Maryland resident return because the same income is being taxed by both states.

[TomD8]

Home ownership does not determine tax residency.

For tax purposes, CA regards someone as a CA resident if they are "present in California for other than a temporary or transitory purpose."  You can find CA's complete rules on residency here:

https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf

If the family member who moved to CA is there to stay, in the Personal Info section of TT he/she should enter CA as their State of Residence and indicate that they also lived in MD during the tax year.  This will prompt the program to generate the correct tax forms for both states.

MD allows married couples who were domiciled in different states at year's end to file either MFJ or MFS.  See page 4 of this MD tax reference:

https://www.marylandtaxes.gov/forms/22_forms/Resident_Booklet.pdf