We are retired SC residents and only my husband has income from part time consulting work for a VA company. In the past I have manually filed by mail 2 separate joint 763 non residents (one for each of us) with his VA income included on his form and 0 VA income on my form. Can I accomplish filing the same scenario for my husband's VA income using TT or will I still need to file by mail as in past years?
1. Yes, you can prepare a VA NR MFJ.
You state that you filed 2 joint 763 returns. You should only file 1 Form 763 as MFJ. You will claim the VA income for taxation. Prepare VA before SC to receive proper credit on your SC return.
2. I would not recommend filing by mail unless necessary.
I mistakenly indicated that we filed joint returns separately. I meant that we filed under "Filing Status 4 = Married, Filing Separate Returns" as VA requires if both spouses have income but only one spouse has VA income. So my question is will I be able to accomplish this through TT. TT would have to generate 2 VA returns one for my husband with VA income and one for me with 0 Va income.
Does your husband work in Virginia at all or just in SC? If he doesn't work there and the company is only based there, you do not need to file a VA return.
I mistakenly indicated that we filed joint returns separately. I meant that we filed under "Filing Status 4 = Married, Filing Separate Returns" as VA requires if both spouses have income but only one spouse has VA income. So my question is will I be able to accomplish this through TT. TT would have to generate 2 VA returns one for my husband with VA income and one for me with 0 Va income.
The consulting firm that employs my husband is headquartered in CT but has many offices around the country. I have been filing by mail under Option 4 Married filing separately as I do not have any VA income, so we file two returns one for him with his VA income and another for me with 0 VA income. I would like to file through TT if this non-resident filing scenario is possible through using TT with electronic filing.
First, as @CatinaT1 states be sure you have a VA filing requirement. VA says VA source income can be from physically working in VA (see the link here and extract below). Having a client in VA that you do not go to VA to do work for does not create VA source income. If your husband does go to VA to work then he would have VA taxable income.
If you do have to file in VA, you do not have to file a separate VA return if you file a joint federal return. If you file a joint federal return you can use filing status 2 for VA as both VA nonresidents.
In TurboTax you would indicate in the "My Info" section you were resident in SC and did not reside in any other state. Then use the "Other State Income" topic and indicate you had income from another state (VA). In the VA state interview you will allocate to VA only the income that belongs to VA. VA will use all of your income to figure the tax only on the VA income.
You will e-file a federal joint return, a SC joint resident return and a VA nonresident joint return.
"Income from Virginia sources" means income derived from labor performed, business conducted, or property held in Virginia, as well as lottery prizes and certain gambling winnings. Examples of Virginia source income include:
DMarkM1
Thank you for your answer. My husband normally works from home but on occasion has to work in VA. However,
Normally we have filed by mail under "Filing Status 4 = Married, Filing Separate Returns" as VA requires if both spouses have income but only one spouse has VA income this filing option is required. So my question is will I be able to accomplish this through TT. Using TT I would have to generate 2 VA returns one for my husband with VA income and one for me with 0 VA income.
First, you are not required to file using filing status 4 if you file a joint federal return. If you file a joint federal return you would file using status 2 and e-file all.
Next, yes, TurboTax will handle all of these filings. You can use TurboTax online by having separate accounts for you and your husband. Or you can use a download/desktop version to create up to five different returns. You will be able to e-file all using either option.
If you do not file a joint federal return then you are required to file using status 4 as you note.
If you choose to file using status 4 then only your husband needs to create/file the VA nonresident separate return. You do not need to file a separate VA return.
Again assuming you are not filing a joint return then your husband would create/file a separate federal return w/resident SC state return and nonresident VA return with only his income/deductions.
You would only need to create/file a separate federal return with resident SC return with only your income/deductions.
I’m in the same boat. My wife received a 1099-NEC from VA. We both reside and work full-time in MD. I don’t have any VA income. We file married joint on our federal return. Are you saying I can do married filing jointly on the VA state return even if we are both nonresidents and I don’t have VA income?
No. If you do not have VA source income, then you cannot be part of the Nonresident return. In order for you to file a joint VA nonresident return, BOTH of you would have to have VA source income that you were reporting.
See Filing Status 2 on form 763
Not per this:
Filing Status 2 - Married, Filing a Joint Return: You and your spouse may file a joint return if: (1) you filed a joint federal return; or (2) neither of you was required to file a federal income tax return; and (3) both spouses had income from Virginia sources. If only one spouse had income from Virginia sources, a separate return must be filed under Status 4. If one spouse had Virginia source income and the other spouse had no income from any sources, use Filing Status 3.
we satisfy # 1. If we didn’t satisfy #1 then we would need to satisfy both # 2 and #3 to file jointly. #1 stands by itself. Is my interpretation incorrect?
Based on what you stated above...You both have income and BOTH must file a federal return, which you do jointly. You do NOT have VA source income only she has VA source income.
From the form 763 Instructions
Married, Filing Joint Return (Filing Status 2) BOTH spouses must have Virginia source income. You and your spouse may choose to file a joint return if both have Virginia Source Income and: • you computed your federal income tax liabilities together on a joint federal return; or • neither of you was required to file a federal return.
When using Filing Status 2 or 3 on Form 763, your spouse’s exemption is included in the “Spouse” column. Do not claim your spouse as a dependent.
So based on the information you provided and the instructions for form 763, in order for you to file a joint VA return, you BOTH must have VA source income as a non-resident so you would not be able to file jointly for VA.
The information you have there almost looks like it may be for form 760 which is the resident return form?
Interesting. I got my info from https://www.tax.virginia.gov/filing-status (nonresidents).
seems like they conflict just a bit.
if I go the route of my wife filing separately how is that done in TurboTax? It recommends I do married, filing jointly and doesn’t give me the option of changing the filing status.
Looking through the thread it seems @DMarkM1 says it is ok to file a VA return jointly if you filed a federal return jointly. Just curious where your interpretation is coming from.
The VA guidance does inject some confusion with respect to non-resident joint filers. Status 2 for non-residents does initially say the non-resident couple can "choose to file a joint VA return," however; the instructions later state, "Status 4 must be used if only one has VA income." The Status 4 instructions also state, "If only one has VA income, separate returns must be filed." Finally, the instructions for VA form 763 state, to use status 2, both must have VA income.
The preponderance of evidence here is @Vanessa A is correct. For VA nonresidents, you must use Filing Status 4 if both spouses are non-resident and both have income but only one has VA income.
In TurboTax the best way to handle filing a federal joint return and a separate non-resident VA return is using a desktop product since several returns can be created in one product. You will create and file your joint federal return and joint MD return. You then create a "Mock" separate return for the spouse with VA source income and only include that spouse's income/deductions on that "Mock" separate return. That "Mock" federal return will not be filed, but is used to create a VA non-resident return with filing status 4 for printing/mailing.
My apologies for adding to the confusion earlier.