Moved to Community Property State (part-year)

[snnybrr]

My spouse and I are going to be filing separately due to her student loans.  We moved to a Community Property state (TX) and would like to know how multi-state filing and form 8958 would work.  Does any TurboTax take care of this, even if it's manual?

Us:

• January

  • Got married

Me:

• January-October

  • Resident of PA; worked in DE

• November-December

  • Resident of TX; work in TX

Spouse:

• January-October

  • Resident of PA; worked in PA

• November-December

  • Moved to TX

Form 8958 itself is pretty straightforward.

What I'm still confused about is whether 1040 will have:

1. actual individual incomes and withholdings; OR

2. split incomes and split withholdings (50%) from 8958; OR

3. actual individual incomes and withholdings but with an adjustment on another line; if so, which one?

In addition, since we only moved to TX in November, that means only that portion of our income would be considered community property, correct?  How does the IRS figure out when we exactly moved?  How do we report the date we moved, and how would the splits be reported? 

[MaryK1]

Since you moved to Texas in November, you will file Part Year tax returns.  The rule is community property applies to residents of a community property state so for the federal return only the income earned in Nov/Dec needs to be adjusted.  Your income tax withholding from W-2s, 1099s, etc. is considered community property, which means that half belongs to your spouse.  You would have to do the adjustments for the 8958 so you both have 50%.