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January 31, 2024
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Spouses Live in NY but One Works in CT

  • January 31, 2024
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My husband and I live in NY, I work in NY but he works in CT.  In previous years we have filed federal Married Filing Jointly (MFJ) and Turbotax pulled info for NY state return and CT Non-Resident return from our MFJ federal.  But is it a mistake to do it that way (are we losing money)?

I have read that we should create a mock Married Filing Separately (MFS) federal return and pull info from that to complete CT Non-Resident return.  Is that the correct/easiest way to do this? 

Can this be done on Turbotax online or only on TT Desktop?

 

Please advise.  Thank you,

momNY

 

 

    Best answer by DMarkM1

    Possibly. CT does allow married taxpayers that are both non-resident and where only one of spouses has CT source income to file as Married Filing Separate (MFS) in CT.  Also, CT, on a joint CT return, does use all income from all sources to first figure the CT tax as though a resident all year.  The CT only income is divided by the total income to arrive at a percentage of income that is CT source.  That percentage is then multiplied by the CT resident tax on everything to arrive at the CT portion of tax.  This may or may not be lower than filing CT MFS due to the many factors involved. 

     

    Additional factors that relate are:  

    • the CT standard deduction for MFS vs MFJ 
    • the CT tax brackets/rates for MFS vs MFJ
    • the percentage of income that is CT
    • finally, you get a credit for taxes paid to another state on your Joint NY return to mitigate the taxes paid on your joint CT return  

    NOTE:  TurboTax enters the information from CT to NY automatically to figure the credit for other taxes when you work the non-resident return first.  However, if work a separate CT return, you will have to enter the figures for income taxed by CT and income tax liability for CT from into your joint NY return.  

     

    In other words every situation is different.

     

    So with that said you could prepare returns both ways to see which is more beneficial to you.  This is best done using a TurboTax desktop product. 

     

    This is not done easily in TurboTax online versions but is relatively easy using TurboTax desktop version since you can prepare up to five different returns for one product.  Here is a link with more information on the process.

    1 reply

    DMarkM1
    DMarkM1Answer
    January 31, 2024

    Possibly. CT does allow married taxpayers that are both non-resident and where only one of spouses has CT source income to file as Married Filing Separate (MFS) in CT.  Also, CT, on a joint CT return, does use all income from all sources to first figure the CT tax as though a resident all year.  The CT only income is divided by the total income to arrive at a percentage of income that is CT source.  That percentage is then multiplied by the CT resident tax on everything to arrive at the CT portion of tax.  This may or may not be lower than filing CT MFS due to the many factors involved. 

     

    Additional factors that relate are:  

    • the CT standard deduction for MFS vs MFJ 
    • the CT tax brackets/rates for MFS vs MFJ
    • the percentage of income that is CT
    • finally, you get a credit for taxes paid to another state on your Joint NY return to mitigate the taxes paid on your joint CT return  

    NOTE:  TurboTax enters the information from CT to NY automatically to figure the credit for other taxes when you work the non-resident return first.  However, if work a separate CT return, you will have to enter the figures for income taxed by CT and income tax liability for CT from into your joint NY return.  

     

    In other words every situation is different.

     

    So with that said you could prepare returns both ways to see which is more beneficial to you.  This is best done using a TurboTax desktop product. 

     

    This is not done easily in TurboTax online versions but is relatively easy using TurboTax desktop version since you can prepare up to five different returns for one product.  Here is a link with more information on the process.

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