Husband lived and worked in TX all year; wife moved to CO partway through year and earned no income in either state.

[RaiderGatorBuff]

Texas has no state income tax, but is a community property state, so we assume the wife must file CO state income tax on her half of the husband's W2 income and half of all joint interest/investments. CO does not allow couples to file state taxes separately if federal taxes are filed jointly. Is it possible for a married couple to file federal married filing jointly, the wife file CO state taxes on her community property half, and the husband file no state income tax since he is not a resident of a state that requires it? How can we handle this situation in Turbotax desktop?

[MaryK4 · Accepted solution]

Can you clarify if she established domicile in Colorado?  If you need to file a part year return, you will have to file a Joint Colorado return if you filed a Joint federal return.  You will be able to allocate the Colorado income for each spouse so the husband will have zero Colorado income and the wife will have the community income for the time period she was living in Colorado.  

See Income Tax Topics: Part-Year Residents & Nonresidents.

[RaiderGatorBuff]

Yes, wife established domicile/residency in CO. Turbotax desktop will walk us through how to file a joint CO return and allocate the community funds, I assume?

[MaryK4]

Yes, TurboTax will walk you through- but you will have to calculate the entries for the Colorado income.  You can use one half multiplied by the percentage of time she was a Colorado resident.  I would suggest keeping a copy of your calculations with your tax records.  @RaiderGatorBuff