Married couple lives in different states

[BOB W]

Never had this before where married couple lives apart, not that they don't see each other. Also not a marital issue. Both states have an income tax. Are they required to file MFS? Can a Joint Fed file a separate States? This is going to be a 2021 issue, so just starting to investigate. They have 4 children and a plane. States are close to each other.

The filing in separate states is VERY important......reason is not important for this discussion....but establishing residency is...

Added Thought: Can head of household (fed) be used to solve problem in each state? Joint return always give the them a lower tax.

[Uncle Sam]

I just had that - for a multiple year non-filer.
Husband resides in 1 state, wife resides in another. No kids or marital issues.
Yes - you can file MFJ for Federal.
But you need to check state requirements - in NY for example - you need to file separately - but H has to file as a non-resident, W has to file as a resident.
Check with your software on how to program the software program to accomplish that.
In my case both spouses work in NY, but H lives in NJ.
What I wound up having to do to make it correct was to file MFJ for Federal, then MFS for NY, then NJ.
For wife, I had to pick her up as a separate taxpayer with her being the primary name, filing MFS as a resident taxpayer. On her account I only filed the state return
as the Federal came from the joint file.
When e-filing, I had to jointly file Federal alone, then file the MFS returns for the states separately.

[BOB W]

I just had that - for a multiple year non-filer.
Husband resides in 1 state, wife resides in another. No kids or marital issues.
Yes - you can file MFJ for Federal.
But you need to check state requirements - in NY for example - you need to file separately - but H has to file as a non-resident, W has to file as a resident.
Check with your software on how to program the software program to accomplish that.
In my case both spouses work in NY, but H lives in NJ.
What I wound up having to do to make it correct was to file MFJ for Federal, then MFS for NY, then NJ.
For wife, I had to pick her up as a separate taxpayer with her being the primary name, filing MFS as a resident taxpayer. On her account I only filed the state return
as the Federal came from the joint file.
When e-filing, I had to jointly file Federal alone, then file the MFS returns for the states separately.

I will check my software ( Ultra Tax) to see what it will allow me to do. Thanks for your reply!

I will compare Head of household results to MFJ to see where the taxes will end up. This is a high income return, 500,000 +.

[New York Enrolled Agent]

I will compare Head of household results to MFJ to see where the taxes will end up. This is a high income return, 500,000 +.

not that they don't see each other.

Be careful - they are married - you need to review the possibility of HOH using the conditions in §7703. Based on what you suggest, I think you may not have that option.

[BOB W]

Thanks, I'll review that issue. It's a year away but either way residency needs to be established with at least 2 of the kids in each state attending K-12.

[Dude]

One spouse is going to have to go out of their way to establish via behavior that their new abode is indeed separate especially if one of the states in question is a community property state. Seems to me separate domiciles will be difficult to prove in a good marriage with children.

[BOB W]

They have homes in both states. One manages multiple NY LLC in one state the other in an investor that can work from any state. 2 kids will go to school with the investor. The other 2 kids will stay with LLC manager. For the most part, overnight location should count for residency location??? A log for proof should be maintained? Not a community property state.

[Dude]

They have homes in both states. One manages multiple NY LLC in one state the other in an investor that can work from any state. 2 kids will go to school with the investor. The other 2 kids will stay with LLC manager. For the most part, overnight location should count for residency location??? A log for proof should be maintained?

Probably will need more than that to convince a rep during an audit that the second home is not just a vacation home. This works both ways vice versa. New DL, license plates, meticulous travel records etc.

[Lion]

Are the kids young enough to be enrolled in local schools, local to each parent, two kids in each state? It can't be two kids living with mom in NJ but going to school remotely in NY. And, where are their "near & dear" things, such as artwork, jewelry, antiques, photo albums, family pets? Family doctors and dentists? Where do they spend family holidays, entertain visiting family/friends, take their Christmas photo? NYSSEA did some great multi-state seminars. Hodgson Russ has some good handouts. (And, their lawyers are outstanding if this family finds themselves in a residency audit!!) NY is VERY aggressive.

[New York Enrolled Agent]

They have homes in both states. One manages multiple NY LLC in one state the other in an investor that can work from any state. 2 kids will go to school with the investor. The other 2 kids will stay with LLC manager. For the most part, overnight location should count for residency location??? A log for proof should be maintained? Not a community property state.

You're missing my point - forget everything else. Married taxpayers cannot file HOH unless they satisfy the conditions of §7703. You stated "it doesn't mean they don't see each other". You need to read the code section.

Here are some words from the Tax Court: Petitioner also argues that he merely "visited" his wife and did not live with her. In Costa v. Commissioner , supra , we concluded that intermittent visits to the taxpayer's home by the taxpayer's spouse were sufficient to find that the spouse and the taxpayer did not live apart.

[BOB W]

Ouch! So much for HOH..... Thanks