Married filing joint Federal, seperate State -- who claims dependants on State returns?

[NothingBurger]

I live and work in RI and my wife lived and worked in KY all of 2020. I followed this guide to make our MFJ federal return and two mock MFS returns to generate individual state returns for us to file separately.

My questions is, who claims children as dependents on our individual state returns? Do we assign them to only one of the state returns? If so, should the spouse listed as the primary filer on the MFJ federal return be the one who claims them on state?

Finally, are there any state laws in RI or KY the would bar me from filing one MFJ federal return and two MFS state returns? Thanks.

[AmyC]

RI requires that you use the same filing status as the federal.  KY will allow the MFS.

KY law states:

If spouses file a joint federal return, but do not file a joint KY return, each spouse must claim his or her own income and deductions.

In my search of legal guidance, I don't see where the law states how to handle dependents on a MFS return. See Kentucky Department of Revenue & Legal Guidance. This leads me to believe you could claim all dependents on the return.

[NothingBurger]

Does this mean I can just MFJ on all of my returns? That would certainly be much easier. I was under the impression I was required to MFS at the state level from the help article.

Thanks for all your help.

[ToddL99]

Yes, you can file as Married, Filing Jointly on all returns (and it is easier). You would allocate the income in the state returns so that your income is not taxed by KY and your wife's income is not taxed by RI.

Answer the Personal info questions carefully, indicating both your and your wife's states of residence are different (if they are). 

Your RI return would presumably list you as a resident and your wife as a non-resident (vice versa for KY).

If your wife decides to file MFS for KY, consider who the children live with when claiming them as dependents. You have a lot of flexibility, but it would seem more reasonable that the parent who has physical custody of the children would be most justified in claiming them.

[NothingBurger]

According to the RI tax website, it looks like there is an exemption in RI that would allow me to file either MFS or MFJ since my wife is a "nonresident" (she lived in KY all of 2020): 

"JOINT AND SEPARATE RETURNS -- JOINT RETURNS: Generally, if two married individuals file a joint federal income tax return, they also must file a joint Rhode Island income tax return. However, if either one of the married individuals is a resident and the other is a nonresident, they must file separate returns, unless they elect to file a joint return as if both were residents of Rhode Island."

So it sounds like we can "elect to file a joint return as if both were residents of Rhode Island," and have my wife file a single MFS return for KY. Does that sound right?

Thanks again for any and all help.

[JohnW152]

Yes, it does. 

According to JOINT RETURNS in 2020 Instructions For Filing RI-1040,

[I]f either one of the married individuals is a resident and the other is a nonresident, they must file separate returns, unless they elect to file a joint return as if both were residents of Rhode Island.

If the resident spouse files separately in Rhode Island and a joint federal return is filed for both spouses, the resident spouse must compute income, exemptions, credits and tax as if a separate federal return had been filed.

[NothingBurger]

OK, thank you for the clarification. With this information in mind, my plan is to do the following:

• Submit a federal tax return as MFJ
• Submit a RI state return as MFJ.
• Submit a KY state return as MFS.

For the KY return, I will create a "mock" MFS federal return that only uses my wife's income and info, which will be used to generate the MFS state return to mail in. 

[NothingBurger]

@ToddL99 wrote:

Yes, you can file as Married, Filing Jointly on all returns (and it is easier). You would allocate the income in the state returns so that your income is not taxed by KY and your wife's income is not taxed by RI.

Answer the Personal info questions carefully, indicating both your and your wife's states of residence are different (if they are). 

Your RI return would presumably list you as a resident and your wife as a non-resident (vice versa for KY).

If your wife decides to file MFS for KY, consider who the children live with when claiming them as dependents. You have a lot of flexibility, but it would seem more reasonable that the parent who has physical custody of the children would be most justified in claiming them.

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I just wanted to mention that while I was able to file as MFJ for RI, the desktop software would not let me do so for KY. The federal return is MFJ and lists me as an RI resident and my wife as a KY resident.

The software lets me create the MFJ RI return just fine. But when I attempt to begin the KY MFJ return, it states that in Kentucky we must create a separate MFS state return.

[JohnB5677]

The best way to prepare a Married Filing Jointly Federal return and two Married filing Separate state returns on the Desktop software is to:

1. Create the Married Filing Jointly Federal return and submit it.
2. Then create two Married Filing Separate returns.  One for you and one for your spouse.
3. Then create the state return for each of you.
4. You will not be able to E-file the state returns without filing the Federal, so you will have to mail the two state returns.

Helpful Filing Tips for Individual Income Tax

To mail your Individual Income Tax Return please review the following:

Completing your Return

• Do not staple or attach your check, W-2s or any other documents to your return.
• Submit proper documentation (schedules, statements and supporting documentation, including W-2s, other states’ tax returns, or necessary federal returns and schedules).
• Use the correct form - forms differ by tax type and tax year.  Look at the bottom of the form for the required pages to submit.
• Double-check your return.
• Review personal information (social security number (SSN), address, date of birth) on your return for each person listed 
• Sign your return.
• Taxpayers must sign and date their returns
• Mail your return, payment, and all necessary documentation to the appropriate address listed on the return.