Recently married (Oct.2017) couple – husband (Indiana) moves to Illinois to be with his wife (full-year Illinois). Filing jointly for federal is significantly more advantageous for them (a difference of over $5500 re: MFS). Husband does not have a job (no IL income) and has not obtained an IL driver’s license or registered to vote in IL – he wants to file MFS as a Indiana resident. While Illinois allows his wife to file MFS even with a federal MFJ… BUT as I understand it, Indiana requires Indiana filing status to be the same as federal, i.e. MFJ. Any thoughts on what I can or should do in this situation?
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If I'm understanding you, W was an IN non-resident, and H was a part year resident?
File IT-40PNR and use Schedule A to isolate IN sourced income.
If you are claiming that he was a full year resident, all income will be taxed by IN, but a credit for IL tax will be subtracted. This would not be advantageous, as the IL credit only lowers the IN state tax, and not the county tax. -
Thanks for your thoughts on this - very helpful! H is clearly a part-year IN resident with his move, so will file IT-40PNR with Sch A to isolate IN sourced income. The county tax will be based only on the IN sourced income - correct? W will file MFS in IL.
Thanks again for your guidance!Comment
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On a PY resident, correct. On a full year resident return, W's earned income could be excluded from county by indicating she lived and worked outside of IN. If she had unearned income, I don't know of a way to exclude that from county tax on a full year resident return.Originally posted by phantan9 View Post
A couple heads up items if you aren't familiar with IN. Part of the fee to register vehicle is fed Sch A deduction; use only the net excise tax, not the wheel tax. IN return allows a deductions for real estate tax and rent paid in IN.Comment
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