Married filing jointly for Fed, want to file MFS for DC as well

[stefanz]

Hi,

Have some questions regarding how we should file DC tax.

We got married last December, moved into DC in November. I moved from VA (VA income + DC income), my spouse moved from MD (No DC income, only MD unemployment income). 

We want to file jointly for Federal, and separately for DC.

1. We tried to do separately on the same return for DC, but Turbo tax want to allocate the unemployment income either to me or my spouse. So I think we need to file Married Filing Separately (not on the same return) to make sure that the unemployment income is not allocated to DC for my spouse or to me which would increase my DC tax liability significantly?

2. If we file Married Filing Separately for DC, does my spouse need to file DC tax at all given that no DC income was made? Is my spouse considerd as part-year resident or non-resident for DC? 

[RobertB4444]

Your best bet to file the state tax separately since your spouse did not live or work in DC at all is to create a separate federal return for yourself as a married filing separate individual and then only file the resulting DC state return.

If your spouse was a non-resident and had no earned income for DC then they have no filing requirement.

@stefanz 

[stefanz]

Hi @RobertB4444  

Thanks for your response! 

1. The follow-up question is that since DC requires the same filing status as federal,(https://otr.cfo.dc.gov/page/individual-income-special-circumstances-faqs) would we be in trouble if we file MFS for DC, and MFJ for Fed? See Amy’s comment in  another post (link down at the bottom)

2. If we can file MFS for DC, do we need to create a new TurboTax account to create a separate federal return for myself as a married filing separate individual? Or we can do it in the same account? And my spouse wouldn’t need to do anything right? Just me if MFS for DC is allowed for us?

Also, for clarification, my spouse did move into DC and also kept the address (family’s) in MD. 

https://ttlc.intuit.com/community/taxes/discussion/re-married-filling-both-lived-in-two-different-st...

[MaryK4]

1. You can file a joint federal return and separate DC returns.  Because your wife moved to DC in November, she would only be required to file a DC return if she had to file a federal return for her Unemployment income (based on a federal Married separate return).

2. Yes to file the Dc return separate, you can follow these instructions: How do I prepare a joint federal return and separate state returns?

Because your wife only had the Unemployment income, you may want to file the Joint DC return, you will most likely have better tax results overall.  It will be a Part Year return and you would only be taxed on the income you made in Dc or while a DC resident. (The only way to know for sure is to prepare the return both ways, but even looking at the time savings it seems you are better keeping the joint return.

@stefanz 

[stefanz]

@MaryK4 Thank you! 

Just for some clarification:

1. You can file a joint federal return and separate DC returns.  Because your wife moved to DC in November, she would only be required to file a DC return if she had to file a federal return for her Unemployment income (based on a federal Married separate return).

So can I or can I not? How do I know if my spouse is required to file a federal return for the unemployement income or not? I mean when we file for Fed jointly, unemployment income 1099-G is added to our AGI already. 

2. I don't think file jointly will get us better tax result, because Turbo tax will slap that unemployment income to one of us for DC tax return if we file jointly or separtely on the same return. DC tax brackets are tiered based on your AGI, with my income and my spouse's unemployement income, the tax bracket would go up a tier.

[MaryK4 · Accepted solution]

1. You can file joint or separate.  

"Generally, you will use the same filing status on your DC return as the one you used on your federal return. However, if you used married filing jointly
on your federal return, it may be better for you to file your DC return using either married/registered domestic partners filing separately or married/
registered domestic partners filing separately on the same return. If both have income, figure the tax both ways to determine which status will give
you the lowest tax."  See 2024 D-40 Booklet Rev 01/2025 

2. If you think the separate return will give you better results, by all means follow the steps in the link of how to prepare the separate state returns.  However, on a Part Year return, you are only taxed on the out of state income you earned while a resident.

@stefanz 

[stefanz]

@MaryK4 thank you for the reference! I saw that too which means we can file Married Filing Separately for DC.

The question now is that - since my spouse has no DC income, is DC state tax required for my spouse at all?

[MaryK4]

DC requires you to file if you were required to file a federal return- so in your case, if you file separate you would look at if she were required to file a separate federal return.  If she only had the unemployment, she would not be required to file a federal return, so she would not be required to file a separate DC return.  See Income Tax Filing FAQs.  @stefanz 

[stefanz]

Thank you both!