Change of state for spouse, working and living in different states

[murlax]

My wife was unemployed and living with me in California until August 2019. My wife then moved to Georgia to work in September, while I am still residing and working in California.

So, as per my understanding, I am a resident of California, but she is a resident of Georgia for tax purposes. Does she need to file taxes for both states? And can she file jointly with me? How do I handle this tax scenario and what would give us the best tax returns?

[KathrynG3]

It depends.  To file both of your returns, it may be best to convert to the CD/Download if you are using TurboTax Online. See this article to learn more: How do I switch form TurboTax Online to TurboTax CD/Download?

This article explains more: How do I prepare a joint federal return and separate state return?

You would be a resident of California. She will be a part-year resident of both California and Georgia, even though she did not earn money while in California.

You would not be required to file a Georgia return per page 10 of the 2019 Georgia IT-511 Individual Income Tax Booklet: 

Legal residents of other states are not required to file a Georgia tax return if their only activity for financial gain or profit in Georgia consists of performing services for an employer as an employee where the wages for such services does not exceed the lesser of five percent of the income received from performing services in all places during the taxable year or $5,000.

Your wife would need to file 2019 Form 540NR for California, for any income received while she resided in California and the income received from California sources while a nonresident.

You will file 2019 Form 540 for California.

[murlax]

Thank you very much for your detailed explanation Kathryn. I will consider switching to the CD download.

I have a follow-up question. My wife was working in a startup and had received a K-1 form for a business partnership in Georgia. Would I need to report that in both Georgia and California states?

[RobertG]

Just report it on your federal return, and indicate that it is yours.

If your wife files Georgia separately as Kathryn suggested, your K-1 will not flow through to the Georgia return.

[DMarkM1]

If the K-1 is your spouse's and she only earned while a resident of GA then only report on her Part-year GA not CA.  Of course it all goes on a federal return. 

[Baronmogul]

You Can File a joint return, yes.

Your residence can be CA for both with the wife earning money in more than one state.