Is 1099-int income split between the two parties after a divorce?

[sam_ds75]

My ex an I divorced and it was finalized in Oct 2022. Are we supposed to split the income on the 1099-int that comes from our joint accounts from prior to the divorce?

[GeorgeM777]

That depends.  Do you live in a community property state?  The IRS states the following with regard to community property:

If your domicile is in a community property state during any part of your tax year, you may have community income. Your state law determines whether your income is separate or community income. If you and your spouse file separate returns, you must report half of any income described by state law as community income and all of your separate income, and your spouse must report the other half of any community income plus all of his or her separate income. Each of you can claim credit for half the income tax withheld from community income.

Have you received the 1099-INT?  While your bank account was in your joint names, generally 1099-INTs will be issued to the primary account owner, and therefore, the primary account owner may pay the tax.  

Additionally, the IRS will likely not follow whatever agreements you may have/had with your ex spouse or whatever your divorce decree includes with regard to tax liabilities.  

@sam_ds75

[sam_ds75]

Thank you for the informative reply!

We are in Oklahoma which is a community property state. Would we split based on that standard or will the individual to whom the 1099-INT is issued to (as the primary account owner) override the designation noted by Oklahoma being a community property state?

Again, thank you for your reply.

[GeorgeM777]

Yes, split the income and report your respective one-half.  Handling the 1099-INT in this manner is consistent with IRS Publication 555:

 Each spouse (or each registered domestic partner) is taxed on half the community income for the part of the year before the community ends. However, see Spouses living apart all year, earlier.  Any income received after the community ends is separate income. This separate income is taxable only to the spouse (or the registered domestic partner) to whom it belongs. 

Here is a link to IRS Publication 555.  The above quoted material was obtained from page 10, Divorce or separation.

 IRS Publication 555: Community Property

@sam_ds75