NC Resident, Spouse VA/NC Part-Year Resident

Forum|Forum|1 year ago
January 28, 2025
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First time doing taxes and looking for some advice for a complex situation!

About me: Originally from VA, but moved to NC and started grad school in NC in May 2022 and graduated August 2024. Started working in NC November 2024. Have 1 W2 from NC.

About my spouse: Wife is in grad school in VA for half of 2024, gets a W2 working in VA working as a teaching assistant. Moves to NC June 2024 to begin a grad school fellowship (not funded by her VA school). Gets W2 through NC.

We get married December 2024. I have 1 NC W2, wife has NC and VA W2.

Questions: I started to file federal taxes as married jointly with no problem, but when filing for state, NC is fine but VA states we have to file married separate because I am a VA nonresident and she is part year for both NC and VA. If this is the case, does this mean we both have to file married separate for federal taxes too and forfeit our education credits? What is the appropriate way to file for our situation?

Also, will her entire NC pay be taxed through VA as well as NC, and vice versa? Is there any reciprocity between these two states?

Are we each able to claim a lifetime learning credit, or just one total?

Any advice would be greatly appreciated!

KrisD15

No, you still have the option to (and you should) file Married Filing Jointly for your Federal return.

No, since your wife was a part-time resident of VA in 2024, only her VA income will be taxed on her VA return and her NC income will be taxed on the NC return. Some states tax ALL the income and then credit for the tax paid to the other state, but as a Part-Year Virginia Resident, she will only pay Virginia tax on her Virginia income.

In the TurboTax software, you will be asked to allocate her income between the two state returns.

It may be easier to complete the Part-Year Virginia return first.

One Lifetime Learning Credit (if applicable) will be allowed on your Married Filing Jointly Federal return.

Education credits are forfeited on a Federal Return when filing Married Filing Separately. (But you do not need to do that)

Virginia Residency Status

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ZAG1265Author

Thank you for your response @KrisD15!

When filling out the Virginia state return, it asks if I had more than one state of residence in 2024. Since my wife lived in 2 states and I answer yes, it says “Based on what you've told us so far, we've determined that you'll need to use married filing separate as your filing status.” This prevents me from moving forward on the Virginia state return.

How would I be able to continue filing married jointly if I continue to receive this notification?

MAK70

Unfortunately, you will not be able to file your state return joint since you and your wife had different state residences. Virginia requires you to file separate state tax returns. See How do I prepare a joint federal return and separate state returns?

@ZAG1265