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ronak041995
Returning Member

Filing jointly but Spouse and I lived in separate states in 2023

Me and my spouse are filing Federal taxes jointly. I lived in New Jersey and worked in New York all of 2023 and my spouse lived and worked in California all of 2023. After entering this data in Turbotax, it suggests filing taxes in all the three states. NJ Resisdent, NY Non Resident and California Resident. Is this correct? If Yes how will the states be taxing our income to avoid getting doube taxed?

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4 Replies
MayaD
Expert Alumni

Filing jointly but Spouse and I lived in separate states in 2023

Yes, you need to file in all three states.

 Your wife's income is taxable on her CA resident return. 

Your income earned while working in NY is taxable on your New York non-resident return. 

As a resident, New Jersey requires that you report all of your income, including what you earned in New York. However, they'll give you a credit for your New York taxes so you don't get double-taxed.

Just make sure you prepare your New York nonresident return first, so we can apply the correct tax credit once you get to your New Jersey return.

How do I file a nonresident state return?

 

How do I prepare a joint federal return and separate state returns?

CA allows you to file MFS when filing jointly on your federal since you were a nonresident for the entire year and had no income from California sources during the year.

 

NJ allows you to file MFS when filing jointly on your federal when one spouse is a resident and the other is a nonresident of New Jersey.

 

For NY, Separate returns are required for some married taxpayers who file a joint federal return. If one of you was a New York State resident and the other was a nonresident or part-year resident

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ronak041995
Returning Member

Filing jointly but Spouse and I lived in separate states in 2023

In Turbotax I see New Jersey is taxing all income including the income my spouse earned while working and living in California and its getting credit for taxes paid to New York and California. Is this correct? Shouldn't it tax only the income I earned in NY while living in NJ?

DMarkM1
Employee Tax Expert

Filing jointly but Spouse and I lived in separate states in 2023

If you are using a joint federal return to create a NJ return then your spouse's income will be included.  The best way to handle this situation is using the link @MayaD  posted and a TurboTax desktop product where you can create several returns in the same product.  Here is that helpful link again.  

 

You will create and file a joint federal return. Then create a "Mock" federal return for you with only your income/deductions.  From that "Mock" separate return you can create your separate NJ resident return and non-resident NY return.  Work the non-resident NY return first so that TurboTax can use the income taxed in NY and the NY tax liability to help you claim a credit on your NJ resident return for taxes paid to another state.  That mitigates the only double taxation.  You will need to print/mail your NJ and NY returns since you are not actually filing the corresponding separate Federal return.

 

You will do the same for your spouse.  Create a "Mock" separate federal return with only her income/deductions.  From that "Mock" federal return, you can generate a separate CA resident return.  The CA return will need to be printed/mailed. 

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Filing jointly but Spouse and I lived in separate states in 2023

Basically you need to prepare 3 returns.  You will want to buy turbotax Deluxe on CD or as a download, because if you prepare these returns online, you will need three accounts and pay 3 separate fees.  The other experts should have posted links to specific instructions, but in general this is what you will do.

 

1. Prepare a federal return as married filing jointly.   You can e-file this return.  Do not prepare a state return.

2. Prepare a federal return for your spouse as married filing separately (MFS).  Include the CA state return.  Ignore the federal return and print and mail the state return (it can;t be e-filed in this situation.)

3. Prepare a federal return for yourself as married filing separately (MFS).  Include the NJ resident return and the NY non-resident return.  Allocate your income carefully; income from working in NY is NY income, but other income (maybe interest and dividends, investments, passive real estate income, etc) will be NJ income only.  NJ should give you a credit for taxes paid to NY.   Ignore the federal return and print and mail the NJ and NY returns.  You can't e-file your state returns in this situation.

 

 

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