Multi-state filing situation with spouse residing in a different state and not working.

[Primaniac]

Hi,

     I am in a bit of a complicated situation and I would like to understand this so that I can use TT H&B more effectively.

I am married and in the process of filing jointly. I lived in MA till August of 2019, after which I moved to MO in September. I was a student in MA and moved for work, so I know either ways, I will have to file in both MA and MO as a part-year resident. That much is clear to me. The problem arises when I factor in my spouse. She moved to the US only in August of 2019, stayed with me for a couple of weeks, at which point she moved to NY for grad school. She did not work, does not have income to report in the US (or elsewhere for that matter). 

Because her domicile/residence is in neither MA/MO, do I need to file state taxes for NY too, given that she did not have any income whatsoever? Also, how does my filing jointly affect my state filings in MA/MO, since we did not/ do not live together still? I have both MA/MO downloaded on TT and have filled out the individual state forms, so I am assuming it will handle the necessary filing jointly/separately on a state-by-state basis?

Looking forward to any advice/help. It is much appreciated and thank you in advance.

[Carl]

I am married and in the process of filing jointly.

For the moment, lets talk about you, and you only. Since your wife has no 2019 income from anywhere on the planet to report, this does simply stuff - but that doesn't mean it's easy. 🙂

I lived in MA till August of 2019,....I was a student in MA

Was your primary purpose for being in MA, to attend school? If yes, then that does not make you a resident of MA. But other factors such as voter registration, getting an MA drivers license, MA car registration and other things, very well could make you a resident. So first, determine your MA residency status.

Assuming your primary reason for being in MA was to attend school, you should read TIR 95-7 and make "sure" you read all the examples - every one of them. Even if your primary purpose for being in MA, there are conditions where you would still be considered a resident of MA and taxed as such. As a resident of MA, "all" of your worldwide income is subject to MA state taxes.

after which I moved to MO in September. 

More than likely, MO may consider you a part year resident. But MO makes the determination rather easy with a simple flow chart at https://dor.mo.gov/pdf/nonres_flowchart.pdf

 As for the wife:

she moved to NY for grad school.

Relocating for the primary purpose of attending school does not change her state of residency. No need to worry about NY taxes, or any other state besides MA and MO since she has no reportable income for 2019.

Therefore, on your joint tax return indicating that she was a resident of the same state you claim residency in, or that she was a resident of another state, will have no impact on your tax liability, or filing requirements.

[Primaniac]

Hi @Carl,

             Thank you for your insights.  Replying to your points, I had lived in MA since 2008, so yes, I was a resident and filed taxes every year. I already did go through the documentation, so my take-away from the whole thing was, since I moved to MO for work, I have established a new domicile in MO (given that I have all the intentions of working for 39+ weeks in the 12 month period succeeding the move). This is why I believe TT picked up the situation correctly about filing my taxes in MA and MO as a part-year resident. 

The reason I got confused was when I indicated my spouse resided in NY, it automatically pulled in a NY state form, but I wanted to be certain that I did not have to file, since it would mean another 45 USD charge. 🙂 

So summarizing your advice, as long as I am filing jointly, and filing both MA and MO as per my residency requirements in each state, I should be good to go and not have to worry about considering her situation, since she does not have any income to report. Did I understand you correctly? (thanks a ton for the advice). 🙂 

[Carl]

Did I understand you correctly?

Yep. I just didn't have the background information for your reasons to be in MA and wasn't making any assumptions. Looks like you got a handle on that though.

Just be advised that "sometimes" it matters which state you complete first when dealing with part year resident returns for two states. In case it matters in your situation, always complete the state returns in chronological order. Weather it matters or not depends on the details of any reciprocal tax agreements between the states involved.

[Primaniac]

Gotcha. That’s something interesting I learned. In any case, since TT imported my previous year’s returns, it filled MA first, which is what you suggested. Guess I’m all set then. Thanks a ton for saving me a lot of time and probably wasted money. Much appreciated. 🙏🏼