Client moved to VA. Wife had no W-2 income. 33% of total income was from VA sources, so exemption allowance is 310/person. On 760PY lines 14 to 18 shows spouse income as -310. Is it correct that because she did not have income that her personal exemption is not deducted, or am I doing something wrong?
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If spouse income is negative, change filing status to #2, Married Filing Joint. It will work out better than splitting. Personal exemptions are based on time in the state, not a percentage of income. Also change exemptions to 2 under Exemptions, Section A, Page 1. Leave Section B blank. On VA PY Schedule of Income, fill out Section A only for combined income. Moving expenses are deductible if moving INTO VA, but not if moving OUT of VA.
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