My wife and I have to file our federal returns married but separate for student loan purposes, but can we still file NYS returns jointly?

[acphil24]

If we file our state returns separately we actually end up owing tax, whereas filing jointly we are able to get a refund. Two main concerns:

1) We don't want the student loan lender (FedGov) to count our income together but not sure this matters for state.

2) It's beneficial for us to itemize the fed returns instead of taking the standard deduction and we have to do either one or the other - it doesn't allow for one of us to itemize and the other to not.

[ChristinaS · Accepted solution]

No- You cannot file a joint return for NY state if you file separate federal returns (whatever the reason).

The only exception to having the same filing status as federal is if you filed joint on federal. In some cases, you could then file separately for NY. In no case can you file separately for federal and joint for NY.

Keep in mind that, in some cases, filing separate federal returns can cost you thousands in tax savings. Make sure that the benefit of lower loan repayments is worth the separate tax returns.

For federal purposes, you either both itemize or you both take standard.  

[acphil24]

Exactly what I needed to know, thank you! Yes, since she's on the 10 year loan forgiveness plan it pays off in the end to file separately. Thanks for the quick advice!

[ChristinaS]

You're welcome- happy to help!