Will spouses unemployment debt affect my return if filing Married Filing Separately?

[sspeer]

My spouse owes Pennsylvania for overpayment of unemployment in 2020. We were married at the time and have always filed jointly. This year we are filing separately and I am getting a refund.  If we file separately and I am getting a refund, will the IRS offset my refund to pay my spouses unemplotyment debt even if we were married filing jointly at the time the unemployment overpayment occured?

[Opus 17]

Filing separately this year keeps your tax return (income, deductions and refunds) completely separate from your spouse's tax return.  The IRS can't offset your refund from a separate return for your spouse's debt.

However, you will probably pay more tax overall by filing separately, because many deductions and credits are reduced or disallowed.

Also, because the tax debt is from a joint return, Pennsylvania could sue you individually or place you in collections, and the "injured" or "innocent" spouse procedures do not apply, because when you signed a joint return, you accepted joint and several liability for all the claims arising from that joint return.

It might be to your advantage to file jointly, claim a larger refund, and use it to pay off the debt sooner rather than later. 

[JohnB5677]

If you file separately, it will not affect you this year.  If previous tax years are assessed, you can file as an injured spouse.

"File Form 8379 within 3 years from date the return was filed or 2 years from the date the tax was paid, whichever is later. If you didn't file a return, you must file within 2 years of the date the tax was paid.  Find details, including times when those periods may be extended, in Internal Revenue Code Section 6511."

Injured Spouse Relief

You can prepare this Form in TurboTax.

Start at Federal

1. Select Other Tax Forms
2. Scroll to Report an injured or innocent spouse claim.
3. Click Start/Revisit
4. Follow the interview.

If this does not completely answer your question, please contact us again and provide some additional details.