Filing multiple states jointly vs separately (MI & CA, moved to OR)

[goblue824]

Hello,

My wife and I got married last year and had initially planned on filing MFJ through TT Online. However, after reading through some of the discussions here, I'm wondering if it is more beneficial to file federal MFJ and states MFS. Wife was a student and resident of Michigan (no income), while I was working in California (wages & investments). We then both moved to Oregon in September.

If MFJ, my assumption was that we would file part-time CA residents & part-time OR residents. However, since CA is a community property state, would that mean that if MFS, we'd have to split investment (non-wage) income 50/50 when filing as part-time resident MI (spouse) and part-time resident CA (me), considering we both lived in the respective states for most of the year?

Thanks in advance for any thoughts and advice!

[JotikaT2]

It depends.

Filing as Married Filing Jointly usually provides the greatest tax benefits of the higher standard deduction and lower tax rates.   

Generally, in California you need to file using the same filing status as you use for federal purposes.  However there is an exception if your nonresident spouse does not have any California source income.  Since this applies to you, you would be able to file as Married Filing Separately for California. 

For your spouse, if she lived in Michigan but had no income, she may not even have a filing requirement if she did not earn any income while being a resident of Michigan.  Please see the following link for more information.

Michigan filing requirements

If this is the case, you would be able to file using the Married Filing Jointly status for your federal return, your part-year California return, and your part-year Oregon return.