Incarcerated spouse

[Joan]

I've posted this on other message boards hoping that someone has some experience or answers on this subject. This is a question we been discussing in the office. Is being incarcerated a temporary absence?

To be considered unmarried for filing purposes, the taxpayer cannot have lived with his/her spouse for the last 6 months of the year, but a spouse is considered to have lived in the house if he/she is temporarily absent due to special circumstances such as education, military service, etc. Pub 17 states that it must be reasonable to assume that the absent person will return to the home after the temporary absence.

It appears to me that being incarcerated for something less than a life sentance would qualify as a temporary absence. Does anyone have any experience with this?

[Koss]

Answer will vary

The spouse who goes away to Europe for a long term business assignment may begin his journey as a temporary absence. Six months later his wife may join him. Or she may not. The total length of his assignment in Europe may be from March 1 to December 31, and he may return to the US three times during that temporary assignment, to visit his family, meet with his US employer, and sleep with his wife.

But the same client, in an alternate universe, may be assigned to Europe for two years. His wife may intend to join him within six months, but then her father becomes seriously ill and she stays in the US. After 18 months, they begin to grow apart. If there are no kids and no real estate, it may not be long before each one is sleeping with someone else. Spoken or unspoken, the marriage is over. Divorce papers get filed after he finally returns to the states.

Incarceration is no different. A nine month stint in the county jail beginning in April and ending the following January could be a permanent separation.

If they do not own a home together, and the guy's wife up and leaves, with the kids, vacating the apartment they lived in, moving 75 miles away, taking a new apartment in her name only, and breaks off all contact with him, she can credibly argue that she is separated from him and did not live with him during the last nine months of the year. This is particularly persuasive if she is a victim of domestic violence, or if he has been locked up because of a substance abuse problem. She does not have to file for divorce in order to assert that she is permanently living apart from her spouse.

Some other guy might be sentenced to three years in a state prison, but have the full support of his wife of nine years. Even if she doesn't visit him every weekend, there may be a sufficiently clear intent that he will return to the marital home when he is released. For example, she may continue to drive a vehicle registered in his name, utilities at the marital home may remain in his name, and she might accept some money from his family to help pay household bills. Joint bank accounts may not be closed.

This is one of those classic issues where there is no bright line.

Temporary absence?

My answer is: Facts and circumstances.

Not to belabor the point, but the same issue can arise with college students. Remember that there is no support test for EIC (and there never was). So a college student under 24 may cross the line into self-support, and the parent can no longer claim the child as a dependent or for Head of Household. For EIC, the age requirement is met because the kid is under 24 and a full time student. What about "lived with you more than half the year?"

The 20 year old who somehow managed to support himself with a lot of hours delivering pizzas, and a bunch of student loans, may be still be living in the dorm, and will still come home during the summer, and might even work at Dad's shop. The kid's car will remain registered at the parent's home. Sounds like a temporary absence, and the parent can still claim EIC. Kid lived with his parents all year. He was away at school for nine months.

But at some point, the facts and circumstances no longer support this interpretation. The 22 old completes her bachelor's degree at FSU, leaves the nest, moves from Tampa up to Boston, leases her own apartment, and enrolls full time in graduate school. Can the parents still claim EIC because she's just away at school?

The lease alone does not determine this question. Some parents will lease an apartment off campus for an 18 year old freshman in college. The lease will be in the kid's name. He may not go home for the summer. But it's still his home.

Does the 22 year old grad student from Florida now have a Massachussetts driver's license?

Or does she still have a Florida driver's license, and a bedroom full of stuffed animals at home in Tampa?

Facts and circumstances and intent.

Burton

[Bees Knees]

For purposes of the dependency exemption, TTB, page 3-15 says "temporary absences for special circumstances, such as for school, vacation...detention in a juvenile facility....count as time lived with the taxpayer."

I would assume the same principal applies to adults, such as an incarcerated spouse.

But as Burton mentioned, you have to consider the facts and circumstances. 9 months in the county jail for a DWI would be temporary. 25 to life for murder would be permanent. Everything in between is open to interpretation.