Living in a different state from spouse while filing as "Married File Jointly", how to correctly file state tax for each of us?

[Phillips99901]

Living in a different state from spouse while filing as "Married File Jointly" for federal tax, how to correctly file state tax for each of us?

* Me and my spouse live in two different states because of work and my spouse's immigration status.

* My spouse is a resident alien in the U.S. while I'm a citizen.

* I've been visiting my spouse in North Carolina from time to time and in total for a few months in 2024 so I'm a non-resident in NC, where my spouse is a resident alien. I'm also NOT working remotely in NC so I do not have income in NC.

* None of my income is from a source in NC and I've paid state tax in my own residency state, so my portion of our income should effectively NOT be taxed for NC state tax? But how to file it that way?

* We chose to use "Married File Jointly" on TurboTax, and it has reached to a point very close to transmitting the final result but it warned the income taxable in my spouse's state was wrong. Our federal tax looks good. And the state tax for my residency state also worked. I've even already paid for the TurboTax service fee.

* My spouse is on J-1 VISA and can claim exemption from taxation on W-2 wage based on a tax treaty between the U.S. and her home country. By adding her W-2 wage as a negative value in Schedule A of Form 1040 in TurboTax, it seems successfully accounted for the exemption, at least for the federal part and the state part for my residency state. Could that be the reason?

* When started the state tax for NC, my spouse is a resident and I'm a nonresident, but the three choices for me to choose the residency category in NC seem all inappropriate.

It asked "Did you make money in North Carolina in 2024, but never live there?" but my situation is that I did not make money in NC nor did I lived there AS A RESIDENT. Am I right? But obviously my spouse IS a RESIDENT alien in NC and has a W-2 wage which is exempted from both state and federal taxation for the first three years of her J-1 VISA. How to correctly account for that for the state tax?

* TurboTax article "How do I prepare a joint federal return and separate state returns?" (c.f. https://ttlc.intuit.com/turbotax-support/en-us/help-article/small-business-processes/prepare-joint-f...)  explains a technique of filing federal tax jointly but state tax separately for each of us by using a "mock married filing separate" preparation first. It seems quite complicated. Is this the right approach? Is it possible to do that with online version as well?

[MaryK4]

For North Carolina, you will need to use the "mock" separate return.  Using the desktop saves money because you can create the additional return, but you can do it online.  Note you will have to mail the North Carolina return, because you cannot e-file a state return alone without e-filing the federal return.  Use the start for free and make the adjustment directly on the W2 entry since it will not be filed, but if you have situations that require you to upgrade you may need to do so.  

[Phillips99901]

My spouse is resident alien in NC. Should my spouse use the lower tier TurboTax online product -- is that what you referred to as "start for free"? -- and start a mock "Married File Separately" federal return, then a NC state return for her income only, then only actually file the NC state tax, with mail, and with the mock federal return attached? Do I need to ALSO attach the actual federal return filed and printed from my account where we filed as "Married File Jointly" with our combined income?

[DaveF1006]

It depends.  NC state is not clear on this, but I think sending in the mock federal return should be enough. This'll allow your spouse to report her NC state income correctly without changing your joint federal return. There is no need to send in the actual federal return.