Question

Married Couple - One in NYC all year, one moved halfway to SC

Forum|Forum|1 year ago
March 10, 2025
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Hi,

I am part of a couple. My spouse and I lived in NYC until 6/30. From 7/1-12/31 he has worked and lived in South Carolina for his PHD Internship. He has unique W2s from NYC (first half) and Souther Carolina (7/1-12/31).

I was trying to file jointly by doing 1 federal return, 1 NYS return and 1 South Carolina State return. TurboTax first suggested we do "Resident OR part year resident filing as resident" - this resulted in my estimated tax bill going up to $6500 - it was clearly wrong and thought that my income from New York counted towards SC, when it was only my spouse who lived there. I fixed this by changing it to "non-resident OR part year resident filing as non-resident" which seemed to fix that issue and properly attributed only my spouse's income to SC. But before Filing I checked out the PDF of the SC State Return and it listed both me AND my spouse living in SC for the second half of 2024, even though it was only my spouse, so I held off on filing.

Would it be better to file separate state taxes even if filing jointly for federal? That would mean doing 1 NYS state return for me for all of 2024, and doing a NYS return for my spouse for the first half of the year and a SC State return for the second half. Is that allowed?

I also found this which seems very tedious, is that what I should do? https://ttlc.intuit.com/turbotax-support/en-us/help-article/small-business-processes/prepare-joint-federal-return-separate-state/L7I53364c_US_en_US

TurboTax Deluxe Online

LenaH

If your spouse is gone for a temporary purpose, then they are still considered a NYS resident and all of their income would be taxable to NYS as they would still be a NYS resident.

In this scenario, you could file joint federal returns and joint NY state returns. The income earned by your spouse from working in SC will be taxed in SC, however, NY will give you a credit of taxes paid to another state. Please ensure you complete the SC return first.

On the Personal Info screen, please ensure that you do not chose the option "Spouse lived in another state in 2024". This will create a part year resident return. Instead, indicate on the page Did Either of you Make Money in Any Other States? that money was earned in South Carolina. This will correctly create a nonresident return.

In a mock return I created:

the entirely of all income will be taxable to NY in a full-year resident return
a nonresident return will be created in which you can allocate your spouse's earnings while in SC
NY will give you a credit of tax paid to another state (SC)

If you have any further questions, please respond in the thread.

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A

alazayAuthor

Thanks Lena!

Could you clarify what defines a temporary purpose? He is living in Charleston for 1 year (from July '24 to July 25) and returning to New York City after that. He does have an apartment in Charleston for now but will be returning to our apartment in NYC when he finishes his internship.

Also when you say that this method will create a "non-resident return" correctly, that would be a south carolina non-resident return, right?

Thanks again,

AL

LenaH

A temporary purpose is for a period of time, but it's not the state they attach themselves to and intend to return to. In fact, domicile does not change unless your spouse has completely abandoned their New York domicile and started a new life in South Carolina, which is not the case in this situation.

Per The South Carolina Department of Revenue, you would only be considered a SC resident if you intent to maintain the state as your permanent home, and when you are away, intent to return back to the state. Since your spouse intends to move back to NY, then it is not his permanent home. Furthermore, South Carolina states that you must file as a nonresident if you have a permanent home outside of SC. Your spouses' permanent home would be New York.

Lastly, you are correct. As a nonresident of South Carolina, a non-resident return of South Carolina would have to be filed.

@alazay

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