Married couple (with kids) work and live different states

[yz493]

My wife and I lived in NC until Oct 2019, then I moved to PA for work and lived there for the rest of 2019, but my wife and kids were still in NC. I plan to use NC as my residency because my family is still there and I don't even have a PA driver license yet. A few questions:

1. For federal return, we will file jointly (MFJ). For state return, my wife only need to file NC return, but I need to file both PA and NC return, right? Shall I file PA state return as non-resident or part-year resident?

2. Some counties in PA require country tax return for residents. Do I need to file county return?

3. I've reviewed past questions regarding this topic. It has been suggested that we prepare a mock MFS for each of us and then file state return based on each mock MFS. My question is: In the mock MFS of each person, shall I only put in that person's income and deduction?

4. If my kids live with my wife, then my wife should claim child credit, right?

Thank you so much for your help. Stay safe!

[DianeC958]

1) Yes, you can still file as Married Filing Joint for your Federal return.

If you are keeping North Carolina as your resident state you can also file North Carolina as Married Filing Joint.

If you are keeping North Carolina as your resident state you would file PA as a non-resident.

If you are going to file as a resident of PA, you need to file a part year resident return for North Carolina and a part year resident return for PA.

The PA return will need to be filed as Married Filing Separate. 

2) Yes, you need file any county return that is due.  TurboTax does not support these forms.

3) Yes, for the MOCK Federal return you need to create to file the PA return as Married Filing Separate you would only include your income.  You do not need to create a MOCK Federal return for your wife.

4) Yes, your wife would claim the children.

[yz493]

Thank you so much for your prompt response. Truly appreciated. Just one follow-up question so that I better understand it. For the two options I have: (a) file NC as resident and PA as non-resident. (b) file NC and PA as part-year resident. What are the pros/cons? Is there any clear-cut tax rule that I must follow or it's completely up to my personal choice?

[ReginaM]

I believe that  this helpful information from the State of Pennsylvania will help you determine how you should file your State of Pennsylvania return.   

[yz493]

Thanks a lot! The link is helpful. Does TurboTax support the functionality of filing 

[yz493]

Thanks a lot. This link is very helpful. By reading those materials, I think I should be a resident in NC and non-resident in PA then. Two operational questions:

1. For NC return, shall I include my income from PA?

2. Does TurboTax support the functionality of filing PA state return as a non-resident?

[ColeenD3]

Yes, you would report all income to NC, your resident state.

Yes, TurboTax supports a PA non-resident return.

[yz493]

Fed tax return has been delayed to July 15. Does TurboTax incorporate this flexibility? How about NC and PA state return? Thanks!

[MaryK4]

These changes will be updated as quickly as possible- please try to understand you are not the only one affected by the recent crisis.

For updates:see NCDOR Actions on COVID-19   The Pennsylvania Department of Revenue is fully closed. (per FTA, 3/17/20) so they have no updates.

@yz493

[yz493]

Can I file NC and PA state taxes electronically, just like the federal return? Or do I have to print them and physically mail them to Department of Revenue in those states? Thanks!

[DianeC958]

Yes, you can file your NC and PA returns electronically, along with your Federal tax return.

@yz493

[yz493]

For PA return, I have efiled through TurboTax. Do I need to print/sign/mail any form to the state department of revenue?

[AmyC]

Unless you have some unusual forms, you are done. If you have something odd, the program tells you what to mail and where. Since you don't know of anything, you should be done! 

[yz493]

Coming back to this thread. My wife lives in NC and I live in PA. For the federal return, we choose to use Married Filing Jointly (MFJ). For each state that we live in, we choose to use Married Filing Separately (MFS). 

I was trying do it in TurboTax by creating a "mock" MFS return, just as the original post mentioned. The federal return was fine. However, for each state, TurboTax does not allow me to do so, and it says something like "You have to file the federal return first" etc. But I cannot file the federal return, because I was using the "mock" MFS return, instead of the true MFJ return.

Do you know how to fix this? Thank you so much!

[SteamTrain]

@yz493 

That's the issue anyone has when filing separately.

Since you cannot e-file the MFS-Federal (i.e. the MFJ-Federal e-file was done in a separate file), thus you can only select to print and mail file each MFS-state tax return. Sign-date, attach appropriate tax forms, and go to the Post Office to send them in (use a tracking method at the PO service counter).

Then the two states will take as long as they take to manually process them according to how many staff they have hired to go thru the paper-files.