493733
I moved to Washington state from Minnesota for a new job June 2017 where I now live and pay rent. My husband lives in Minnesota and we own a house together there. This move is not short-term, it will be at least two years. However, I received income and payed taxes for the first quarter of 2017 from Minnesota. Should my husband and I just file separately for both federal and state taxes so I can file as a nonresident in Minnesota? Washington state does not have income tax and I don't want to pay Minnesota state income tax when I am not living there.
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You can, but you don't have to. Minnesota does require you to use the same status on your Federal Return as your State return. In addition, Minnesota will continue to consider you a resident unless you can establish, on the principle of Spousal Presumption, that your husband will soon join you in Washington. Please click on the following link for a webpage with additional information (scroll down to Spousal Presumption at the bottom of the page): Domicile
If you can legally establish that your husband will be joining you (relatively soon), you may be able to still file joint and claim that you were part-year residents of Minnesota, even though all of his income will still be taxed in Minnesota. However, if the intention is that you will return (read the rest of the page), even though that may be a year or two down the line, you remain a Minnesota resident if you file a joint return and Minnesota taxes you. Thus, if you do not wish for Minnesota to tax your Washington income, you will need to file separate returns to do so.
On the other hand, Married Filing Separately on the Federal Return may not be the best solution either, since there are many credits and deductions that are forfeited when you file separately. Also, Washington is a community property state, and, while your separate income in Washington should not be considered community property (since your husband will continue to be a resident of separate-property Minnesota), you will still want to be sure of how the community property law applies to you specifically, as that law has a significant impact on a couple looking to file as Married Filing Separately.
Best suggestion: try your return both ways. First set up the return filing joint, and see what the state consequence is. Then, set up the return as Married Filing Separately and see what is the better overall result. Choose the result that results in lower tax.
For many other states, it might have been possible to use a different filing status on the state return (some would have allowed you to file separately although the Federal is joint, others might have treated you as a part-year or a nonresident), but Minnesota's law is pretty firm. Unless you can establish the Spousal Presumption that your husband will soon be with you in Washington, you will have to determine if the state benefits for filing separately so your Washington income is not taxed in Minnesota are greater than the Federal benefits for filing a joint return. Choose the result that best benefits you.
You can, but you don't have to. Minnesota does require you to use the same status on your Federal Return as your State return. In addition, Minnesota will continue to consider you a resident unless you can establish, on the principle of Spousal Presumption, that your husband will soon join you in Washington. Please click on the following link for a webpage with additional information (scroll down to Spousal Presumption at the bottom of the page): Domicile
If you can legally establish that your husband will be joining you (relatively soon), you may be able to still file joint and claim that you were part-year residents of Minnesota, even though all of his income will still be taxed in Minnesota. However, if the intention is that you will return (read the rest of the page), even though that may be a year or two down the line, you remain a Minnesota resident if you file a joint return and Minnesota taxes you. Thus, if you do not wish for Minnesota to tax your Washington income, you will need to file separate returns to do so.
On the other hand, Married Filing Separately on the Federal Return may not be the best solution either, since there are many credits and deductions that are forfeited when you file separately. Also, Washington is a community property state, and, while your separate income in Washington should not be considered community property (since your husband will continue to be a resident of separate-property Minnesota), you will still want to be sure of how the community property law applies to you specifically, as that law has a significant impact on a couple looking to file as Married Filing Separately.
Best suggestion: try your return both ways. First set up the return filing joint, and see what the state consequence is. Then, set up the return as Married Filing Separately and see what is the better overall result. Choose the result that results in lower tax.
For many other states, it might have been possible to use a different filing status on the state return (some would have allowed you to file separately although the Federal is joint, others might have treated you as a part-year or a nonresident), but Minnesota's law is pretty firm. Unless you can establish the Spousal Presumption that your husband will soon be with you in Washington, you will have to determine if the state benefits for filing separately so your Washington income is not taxed in Minnesota are greater than the Federal benefits for filing a joint return. Choose the result that best benefits you.
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