Married and living in different states

[kjensen1221]

My wife and I are Iowa residents with 4 dependents. I am considering accepting a job in Minnesota and becoming a Minnesota resident while my wife (she works in Iowa) and children remain Iowa residents. What are our filing options? 

[TomD8]

@kjensen1221 --

Minnesota and Iowa both require that you use the same filing status (MFJ or MFS) that you used on your federal return.

[masscircle]

I will be starting a new job in Virginia while my wife stays in the house we have in Pennsylvania. I will be renting a place in Virginia and very likely stay there over 183 days with travelling back to PA to visit my wife and kids. In this case, what will be the best filing strategy for us? Can we still file Federal as Married filing Joint? If that is possible, will that be ok if we use the PA address? Do we need to file Married filing Separate for the states? Does reciprocal agreement between VA and PA allow me to file state income tax as a PA resident? Thank you so much for help! 

[TomD8]

@masscircle --

Q: "Can we still file Federal as Married Filing Joint?"

A:  Yes.  Your federal filing status is not affected by your State of Residence.

Q: "Will that be OK if we use the PA address?"

A:  Yes.  The address on your tax return should be the address you want the IRS to use if they have to send you a letter or a check.

Q:  "Do we need to file Married filing Separate for the states?"

A.  If your main, primary home (your domicile in tax terminology) is going to remain in PA, then you are a domiciliary resident of PA, and you may still file MFJ for PA.  If you live in Virginia, or maintain a place of abode in Virginia, for more than 183 days during the tax year, then VA will tax you as a resident ("statutory residency"), and you would have to use the MFS filing status on your VA return.  A "dual resident" is a person who is a domiciliary resident of one state and a statutory resident of another.  

https://www.tax.virginia.gov/filing-status

If you become a dual resident. then the PA-VA reciprocal agreement would not apply.  You would have to file as a resident in each of the two states.  In this situation you would be able to claim a credit on your PA return for the taxes paid to VA, so you wouldn't be double-taxed.

If you do not become a statutory resident of VA, then the reciprocal agreement would apply and the income you earn in VA would be taxable only by PA.

[masscircle]

@TomD8 Thank you so much for the explanation. Just a follow up question. If I become a Virginia resident due to the fact I need to rent and maintain a place for more than 183 days and work in VA , am I still obligated to file PA tax simply because that my name is on the deed of the house? 

[TomD8]

@masscircle -- 

Your obligation to file taxes in PA is based on the fact that your state of domicile appears to be PA.  Your family lives there, you return there regularly, etc.

If you were to change your state of domicile to VA, then you would no longer have a tax obligation to PA unless you had non-W2 PA-source income.

See "How do I establish a new domicile?" in this PA tax reference:

https://www.pa.gov/en/agencies/revenue/resources/tax-types-and-information/personal-income-tax/deter...

[betty1104]

Can Georgia and Florida married residents file jointly? 

[TomD8]

If one spouse is a Georgia resident and the other is a Georgia non-resident with no Georgia-source income, then the GA tax return may be filed as either MFJ or MFS.

FL has no state income tax.

[AmyC]

Yes, you can file MFJ for GA and pay tax on the GA portion of the income.  If you want to file MFJ, GA law requires you to file as nonresidents and report your GA income.  The program will vary based on the home address you have listed so be sure to mark that you are filing as a nonresident.

When you select nonresident for GA, the computer will go through the income items for you to select how much should be taxed in GA for each type of income.

You can file MFS. The program will ask.

For additional information, see Filing with nonresident spouse in Ga

@betty1104 

[kewo35]

I work and live in PA. My husband works in NY and lives there for 25-50%. He has some tax credits/benefits for filing his state tax in NY so we want to keep it like that. What is the best way to approach this from the federal and state level?

[TomD8]

@kewo35 --

Your federal return is not affected by where you live and work.

Assuming that PA is your husband's main, primary home (his domicile in tax terminology), ALL of his income is taxable by PA, regardless of where he earns it.

https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/personal-income-tax/determin...

In addition, NY can tax him as a non-resident on 1) all the income he earns from work physically carried out within NY; and 2) all the income he earns by working remotely from PA for his NY employer - unless his NY employer has required or assigned him to work remotely from a PA location.  In other words, if he works remotely for his own convenience, then his remotely earned income remains taxable by NY.

So, he will have to file both a non-resident NY tax return on which he reports his NY-taxable income, and a resident PA tax return on which he reports all his income, including his earnings from NY.

He will be able to claim an "other state credit" on his PA return for the taxes paid to NY, so he won't be double-taxed.  The credit may not exceed his taxes due to PA.

With TurboTax, prepare your tax returns in this order:  

1.  federal

2.  non-resident state

3.  resident state

[kewo35]

Would we file married filing jointly for both federal and state, or jointly for federal and separate for state?

[AmyC]

It depends on his actual residency status.  PA and NY are part of the NESTOA agreement for domicile vs resident status, which may describe your situation. A resident intends to live there, registered to vote, car tag, etc. Domicile is where you happen to live due to work, not where your heart is. You could both be PA residents- if his intent is to live there and he spends a good bit of time there.

Please see how PA views residency and learn about NESTOA at PA Filing requirements. If you scroll on, you will see that you file joint unless you choose to file separate because he is not a PA resident.

Please see page 36 for NY domicile here.

If your husband is a NY resident and you are not, then NY requires him to file a separate state return. See here. You can file a joint for PA regardless of his residency and claim a credit for NY tax paid on the same income taxed by PA.

From the time reference you gave, it sounds like you are both PA residents with him possibly domiciled in NY. This would be a simple MFJ for federal and both states.

[mr991]

Hello Shirley,

My husband and I lived in MD. End June he moved from his civilian job in MD to active military duty in TX. I stopped working end June, and moved from MD to TX mid-December after selling our house. Can we file our different moving dates for our State taxes in MD?  Thank you. 

[DianeW777]

Yes, you can file your Maryland (MD) return as a part year resident. On the MD return, include only the income earned during your residency period.  No income earned after your move would be taxed to MD except for the home sale. Since the home was sold while you still lived in it and were still a resident of MD, then you should qualify for the home sale exclusion if you qualify for your federal return.

Key Eligibility Requirements: IRS Publication 523

1. Do not change ownership of the home on the deed.
2. Ownership: If you owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing), you meet the ownership requirement. For a married couple filing jointly, only one spouse has to meet the ownership requirement.
3. Use: If you owned the home and used it as your residence for at least 24 months of the previous 5 years, you meet the residence requirement. The 24 months of residence can fall anywhere within the 5-year period, and it doesn't have to be a single block of time. All that is required is a total of 24 months (730 days) of residence during the 5-year period. Unlike the ownership requirement, each spouse must meet the residence requirement individually for a married couple filing jointly to get the full exclusion.
4. Look Back Period: If you didn't sell another home during the 2-year period before the date of sale (or, if you did sell another home during this period, but didn't take an exclusion of the gain earned from it), you meet the look-back requirement. You may take the exclusion only once during a 2-year period.
5. Exceptions - May not apply to you and can be reviewed at the link above.

@mr991