Married filing jointly yet living apart

[Deleted]

This is a hypothetical question that my fiance and I probably will have to deal with in 3 years from now and since I am doing both taxes and wedding plan it came to mind. If one person was living in one state with their child and the other was working/living in another state how would you do the state taxes?

[nancy65]

It depends on which states. Some states require the use of the same filing status as federal, and some states allow the use of a different filing status.

[Deleted]

But then wouldn't we be taxed on income earned in the other state and therefore be taxed twice?

[nancy65]

No. The income is apportioned to the state where is it earned.

[Deleted]

And I could use married filling jointly on both, correct?

[mwcpa]

spouse 1 lives and works in state A
spouse 2 lives and works in state B

this is going to be a bit messy... but

if 1 and 2 filed a joint federal return, generally they would need to file a joint state return (most states, but some have different rules)
in theory state A would tax 1 and 2 as "residents," but a "credit" should be available to offset the tax on the wages 2 earned in state B
in theory state B would tax 1 and 2 as "residents," but a "credit" should be available to offset the tax on the wages 1 earned in state A

but "unearned income" like interest and dividends would be taxed by both states

you need to review the rules of the two states in question, my comments are only theoretical.

[rangerj]

There are 50 states and 50 variations on the tax topics. Generally states tax those who are residents, as defined in the states laws, and the states tax those who earn income (not necessarily "earned income")while in the state, or has income earning property in The state, e.g. rental property or other investments. I do not know of any state that attaches "residency", or jurisdiction, to marital status.

[michelyn8]

Different states have different rules but If I remember correctly, NC requires that state taxes be withheld for the state the work was performed in. In VA, they want you to withhold VA taxes regardless of where you worked. I think MD or SC, you withheld the taxes for the resident state only.

So if a construction worker lived in VA and worked for a company based in VA but on a project in NC, we were supposed to withhold state taxes for both states but report unemployment to the state they were working in. What we did though was only withhold for the state where the project was located since that was where we had to report for unemployment.

When they filed their returns they could get credit for NC taxes on their VA return but they also had to file one in NC. Don't really remember how that worked though.

I do remember that when my uncle still had rental property in VA, he would travel up here every year to have a VA return done for that income.

You

[rangerj]

Added thoughts;
If you file MFJ federally and your state requires that your state return also use MFJ then there should be a line on the state return for "adjustments" or "exclusions". For example if the state income begins with the federal AGI the state will usually allow an adjustment to exclude things like federal savings bond interest and state tax refunds that are included in the federal AGI. There should be a provision for excluding income earned in another state prior to becoming a state resident, or income earned by one spouse who is not a resident of the state, as in the OPs question. If the state form does not provide for this then an attachment to the return should be prepared and filed with the return to exclude the "out-of state" income of the "out-of-state" spouse. However, I'm not sure how this should be handled in community property states. Is the community property state entitled to tax 1/2 of the "out-of-state" spouse's income?