Spouse working in different state, tax situtation?

[vd10011]

My spouse works in a different state, which has no reciprocal agreement with our resident state. Can we file jointly for federal and our resident state and she files separately for the state she works in?

[rjs]

What state does she work in? Different states have different ways of handling this situation.

[vd10011]

Thank you for your reply. She works in NJ and our resident state is WV.

[vd10011]

Thank you for your reply. She works in NJ and our resident state is WV.

[AmyC]

You can file a joint return for everything. You want to prepare the NJ nonresident form and the program will ask if all the wages were earned in NJ. You can separate out the NJ portion.

Your resident state taxes all income but gives a credit for income taxed by another state.  Please carefully follow these directions to prepare the states in a special order. You may need to delete both states and begin again.

1. First, prepare your non-resident NJ return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
2. Then prepare your resident state WV return and it will generate a credit for your income already being taxed in the non-resident state.
3. The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state, if they have a higher tax rate.

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.

[rjs]

@vd10011  Does your spouse physically work in New Jersey? That's an awfully long commute from West Virginia. If she works remotely from WV for a NJ company, even part of the time, any money that she earns for work that she does in WV is WV income, not NJ income. She does not pay NJ tax on income for work that she actually performs in WV.

[vd10011]

No she works in the state of NJ and rent an apartment there. Our permanent home is is WV.

[vd10011]

Thank you for your reply. That is nice option.

Would it be wrong if;

We file federal and WV tax together and only she file NJ state as a non resident? Not sure if our tax return will be rejected if we do that.

[rjs · Accepted solution]

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@vd10011 wrote:

Would it be wrong if;

We file federal and WV tax together and only she file NJ state as a non resident? Not sure if our tax return will be rejected if we do that.

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It would not be wrong. In your situation, your spouse could file a New Jersey non-resident tax return as married filing separately. (This is assuming that she is the only one who has any NJ income.) To do this, she would first have to prepare a dummy federal tax return, that she does not file, as married filing separately. Then prepare her separate New Jersey tax return based on the dummy federal return. She would not be able to e-file the NJ tax return. It would have to be filed by mail.