MFS on MD State Return

[ladytbw]

Does anyone know if Maryland requires couples to file the same status on both returns? Can one file MFJ on Federal return & MFS on Maryland State return?

[DMarkM1 · Accepted solution]

It depends.  MD tax law says,   "Generally, you are required to use the same filing status on your Maryland income tax return as used on your federal income tax return or the filing status that you would have used if required to file a federal income tax return.  This applies whether you are a resident or nonresident of the State of Maryland."  Here is the MD reference.  (See the items "Determine your filing status" and "Married Persons."  

There are however special circumstances where MD allows a couple who filed a joint federal return to file MD separate returns (see below for special circumstances).  

If you fall into one of the special circumstances then you should use a TurboTax desktop version which allows you to complete up to five different returns.  Here is a link that may be helpful.  

You will complete and file a joint federal return.  You will complete a "Mock" federal separate return for yourself with only your income that will allow a MD separate return to be completed. You will have to print/mail that state return.  

You will do the same for your spouse (Mock separate Federal return to generate a MD separate return for print/mailing).  

Married couples who filed joint federal returns but had different tax periods (Lived in MD for different periods)

Joint return or Married filing separately 

Married couples who filed joint federal returns but were domiciled in different countries, cities, towns or taxing areas on the last day of the tax year

Joint return or Married filing separately

Married couples who filed joint federal returns but were domiciled in different states on the last day of the tax year

Joint return or Married filing separately 

All other married couples who filed joint federal returns

Joint return

[SN29]

For 2022, my spouse lived in MD from 01/01/2022 to 06/12/2022.  For the remainder of 2022 my spouse lived in FL.  I lived in FL for all of 2022.   For 2022, can we file MFJ federal with MFS MD (spouse only)?  Thanks!

[ladytbw]

Thanks for the info. This really helped me finish filing my returns.

[DawnC]

Married couples who filed joint federal returns but had different tax periods (Lived in MD for different periods)

Joint return or Married filing separately   @SN29 

See DMark's post above (best answer) - since you and your spouse lived in MD for different time periods, you do have the option to file the MFS MD return.   As he states above, you will need to prepare a joint federal return and then do the mock returns to generate an MFS state return.    

How to Prepare Joint Federal and Separate State Returns

[SN29]

Thanks much for clarifying.  The "living in MD for different periods" part is slightly unclear since I did not live in MD at all for 2022 (no MD return for me?).  So, if husband and wifes' MD tax period differ by 1 day or more, then the MD MFS option is available?  Since my MD tax period is 0 days then no 2022 MD tax form is required from me - just spouse?

[ThomasM125]

Yes, you would qualify for living in Maryland for different periods of time during the year, so you could file married-joint on your federal return and married-separate on the Maryland return, since you were not a Maryland resident for the same months your spouse was. @SN29 

[snowprairie]

How about married couple, neither one is a Maryland resident, but one has W2 income from Maryland and the other has W2 from their home state? 

In this case, it seems to make sense if the couple file married-joint on their federal return, and then the one with Maryland income files married-separate on the Maryland return as a nonresident while the other spouse with no Maryland income should not have to file a Maryland return at all.

Non of the scenarios covers this case specifically under "Determine Your Filing Status" on https://www.marylandtaxes.gov/individual/income/filing/index.php

Hope someone who has done this before can confirm if the understanding above is correct.

Thanks!

[AmyC]

If you are filing MFJ on federal, it is easier to file MFJ on MD as nonresident and remove the non-MD income. MD begins with the federal AGI. A nonresident can remove income not from MD to file based on MD taxable income.

Filing as MFS when you are both non-residents is acceptable when the federal is also MFS. There are a few states where MFS is better, MD is not one of them.

The nonresident instructions state to follow your federal return and indicate MD income.

[Edit 4/1/2023 |8:48 AM]

@snowprairie 

[snowprairie]

Thanks @AmyC for your quick response! Did both ways in TurboTax but MFS on MD is better than MFJ on MD based off the MFJ federal return. The only thing I can think of is, maybe combined income push the MD exemption amount to be phased out. But the difference shouldn't be that much though. 

[AmyC]

The exemption amount does change due to the income percentage becoming 100%.  However, let me repeat, the MD instructions say for a nonresident to use the same status as the federal return. See page 6 of the MD nonresident instructions state: Check the filing status box that matches the filing status you used on your federal return unless you are a dependent taxpayer.

The IRS and state will be sharing information.

[TJ212]

Hi Amy - Thank you for the detail. If I lived and worked in MD for the full calendar year, and my spouse lived and worked in NJ for the full calendar year. We file our federal taxes MFJ. Shouldn't I be filing 502 (resident return) form for MD as MFS and my spouse should be filing NJ resident return as MFS?

[DaveF1006]

The state of Maryland would be filed MFJ and is your resident State. NJ is non-resident but would be filed MFJ also. Your NJ return would be prepared first and you will be given credit for the taxes paid in NJ on your Maryland return.

[Edited 02/02/22|9:15 am PST]

[TJ212]

Thank you, David for the clarification. How does one accomplish that via Turbo Tax? When I am filing state taxes, it automatically defaults MD into MFJ and suggests to file it as non-resident. We don't have the same issue with NJ. Any suggestions would be appreciated!

[DaveF1006]

I apologize for my earlier answer as I didn't fully read your post it in its entirety. The state of Maryland would be filed MFJ and is your resident State. NJ is non-resident but would be filed MFJ also. Your NJ non-resident return would be prepared first and you will be given credit for the taxes paid in NJ on your Maryland return. 

Let us know if this works and reach out to us if you have additional Questions.

@TJ212