Accounting for California Tax Refund from previous year

Forum|Forum|1 year ago
February 8, 2025
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My wife and I filed jointly last year, and this year we will file separately.

How do I account for California’s tax Refund from last year? Do we split it and manually enter half the refund on our return?

TurboTax Deluxe Online

MonikaK1

Yes, you would split the refund if it was community income. California is a community property state. When filing a separate return, each spouse/RDP reports the following:

One-half of the community income
All of their own separate income

Community property rules apply to the division of income if you use the married/RDP filing separately status.

If you’re married/registered domestic partner (RDP), you may choose to file separately. Each spouse or partner will prepare a separate tax return and report their individual income and deductions.

Tax rates are higher for the married/RDP filing separately filing status
If one person files itemized, the other spouse/RDP must file itemized as well
Generally, you do not qualify for Earned Income Tax Credit (EITC) or Child and dependent care credit. Check the CALEITC eligibility page for more information.
Standardized deduction is reduced (1/2 of married/RDP filing jointly)

See this California FTB webpage and IRS Publication 555 for more information.

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Fgarza2146Author

@MonikaK1

So to be clear, we spilt the amount on the 1099-G in half since we both are named in it?

MindyB

Yes, that is correct. Divide the amount in half, and you will each report half. As @MonikaK1 mentioned, you both need to agree to itemize or take the Standard Deduction on your separate returns.