If you and your spouse are filing
a joint federal return but you work in or are residents of different states,
you may need to file separate state returns.
Sometimes this is required by
state tax law; other times it is to your best interest to not include your
non-resident spouses income on your state return. Otherwise both states may try
to tax the same income.
You can use TurboTax Online to
file separate state returns, but we recommend you use the CD/Download
software version to do this because you'll only
need to pay for one TurboTax product (you can file up to 5 returns).
Tip: If you already started your return in TurboTax Online, we
recommend that you transfer
your tax file to the CD/Download version. You
will save time by entering less information.
Here's a brief overview of the
procedure, see the sections below for detailed steps:
- You'll
prepare one married filing jointly (MFJ) return to file
with the IRS.
- Prepare
a "mock" married filing separate (MFS) tax return for each
taxpayer. This is for your records only, and will be used to generate
separate state returns for each person. the mock federal returns are Not filed.
- Then
for the first taxpayer, label
and use the first "mock" married filing separate (MFS) federal
return to prepare their state MFS return, using only their income and
their half of the deductions from the MFJ federal return..
This ensures that TurboTax only transfers the first taxpayer's income to
their married filing separate state return. File this MFS
state return, but not the mock federal return that it
pulls the information from.
- For
the second taxpayer (spouse), label and use the
second "mock" MFS federal return to prepare their state MFS
return, again using only their income and their half of the deductions from
the MFJ federal return.
Again, file
the second MFS state return, but not the second mock federal return
that it pulls the information from.
Be sure to name each TurboTax
federal return so you know the MFJ federal return to file, and which mock MFS federal
and state return is for which person.
Yes, this can be tedious, but this is often the best way to ensure you
accurately minimize state tax situations with two different state incomes.
Note: State returns prepared using the "Mock" federal
returns will require you to print and file your state return by mail, please click
here to learn more.
For detailed instructions, click
the link below for the taxpayer(s) that need to file a state return.
Prepare a state return for the primary taxpayer
The primary taxpayer is the first taxpayer listed on the
return. In the TurboTax CD/Download version:
- Open
your completed Married Filing Jointly (MFJ) return (the real return you'll
file with the IRS), and
- Then save it with a new file name,
for the primary taxpayer.
- This
will be your "mock" federal MFS return used for the real MFS
state return This mock federal return is Not
Filed..
Very
Important! This renaming step ensures that
your original joint return (the one you file with the IRS) remains intact for
you records. The "mock" federal tax return you create next will be
used to remove the secondary taxpayer's data so it doesn't transfer into the primary
taxpayer's state return. Otherwise, you'll end up paying tax twice on that
income. Continue in TurboTax:
- On Personal Info,
click You
& Your Family, then scroll down to the Your Filing Status topic and click Edit.
- On
the Review
Your Filing Status screen, check Change my filing
status and
select Married
filing separately, then click Continue.
- Revisit
the income topics in your federal return to remove all income items that
belong to the secondary taxpayer (e.g., Forms W-2 or 1099).
Also remove all deductions that apply to the secondary taxpayer (e.g.,
medical or educational deductions). You'll also need to determine how to
split any joint deductions, be careful not to miss any, or use any
deductions twice!
- Now
run the federal error check (Review > Analysis). When finished,
you have the primary taxpayer's mock return.
- Click State Taxes (this
pulls the state data from this mock return) and complete the primary
taxpayer's state return.
- When
finished, print the state return for your records and paper-file the
primary taxpayer's state MFS return.
Important: Do not file the "mock" MFS federal return you
created here. It was only used to separate the primary taxpayer's income and
deductions for state tax purposes. However, do not delete the return in case
you need to view or amend the primary taxpayer's associated state MFS return.
Prepare a state return for the secondary taxpayer (spouse)
The secondary taxpayer is the second person listed on the
return.
Like the steps above, you'll
create a second new "mock" federal MFS return
for the secondary taxpayer. This is the only safe way to keep the two mock
federal returns connected with the correct state returns.
- In
TurboTax (CD/Download version), start a new return by choosing New Tax Return from the File menu, and then clicking Start a New Return.
- On
the transfer screen, select Continue
Without Transferring. Do not transfer information from last
year's joint return!
- Create
the "mock" federal return entering the secondary taxpayer's
personal information, income, and deductions. For the filing status,
choose Married
filing separately.
- Be
sure you do not include any deductions already claimed by the primary
taxpayer. Only the secondary taxpayer's income and deductions should be
entered in this mock return.
- When
finished, run the federal error check (Review > Analysis).
- Then
click State
Taxes and
complete the secondary taxpayer's state return.
- When
finished, print the state return for your records and paper-file the
secondary taxpayer's state MFS return.
Important: Do not file the mock MFS federal return you created here. It
was only used to separate the spouse's income and deductions for state tax
purposes. However, do not delete the return in case you need to view or amend
the spouse's associated state MFS return.
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