Maryland Two-income Deduction

[bob110]

Seems like TurboTax is not processing MD two-income marriage deduction correctly.  s/w will only insert the $1200 deduction when the Spouse income is greater than $8200.  At $7000 it eliminates the deduction. Looks like the work sheet is not separating each spouse's wages and takes a percentage of the calculates the joint filers wages.  For example, if wages totaled $7262 TurboTax calculates the deduction as $262 (3.61% of actual wages).  I cannot find income requirements in Md instructions.  

[bob110]

OK.  This is how TurboTax is processing this.  They are reducing spouse wages to a negative number because of her contribution to her Traditional IRA.  Then when it looks at the two-income deduction, it sees a negative number and does not compute the $1200 deduction.  I get that but do not see where the MD worksheet or tax instructions show that the IRA contribution has to be subtracted from income (many other situations are listed but it is not).  The requirements are: marred filing joint and both have taxable income.  OK, one may say the IRA wipes out her income but when filing jointly, the contribution just reduces the overall taxable income (she isn't even required to have income in order to contribute to her IRA (as a non-working - or working spouse, not under a retirement plan).   The s/w needs updated to fix this.