It depends. In Minnesota (MN) you have the option of filing married filing separately or married filing jointly. However there are certain credits that do not apply for married filing separately for both states. And a nonresident spouse creates additional complications.
You may want to set up two TurboTax accounts online. One to file jointly and one to file separately. Then use the one that is most advantageous.
Your income:
Spouse Income:
Since your spouse lives in Wisconsin (WI) all year, then all income is taxed to WI. MN and WI do not have a reciprocal agreement which simply means they each want tax on the money earned in their state. They do recognize a credit for taxes paid to another state as shown below.
Credit for Taxes Paid to Another State:
Your resident state requires that all worldwide income must be reported on their return. Credit for taxes paid to another state is allowed by a resident state when the same income is being taxed to another state. Your resident state does not want you to pay tax twice on the same income. The credit that is allowed will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
Prepare the NONRESIDENT state return first, then prepare your resident state. TurboTax will recognize this credit.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
