Hello, my question is how my husband and I should file our taxes. For the entire year of 2008 I have lived in NYC and he has lived in Washington, DC, and both have income from our respective places only.

What are our options for filing state taxes? Are we allowed to do married filing jointly, or must we file separately?

If we file separately for state purposes, may we still do married filing jointly for federal purposes?

Any help would be appreciated.

You CAN file Married Filing Separately, but, most likely, filing jointly is better for you.

If you file jointly on your federal return, you for sure have to file file jointly on your NY return and probably the same for your DC return.

In either case, you only pay taxes for income earned within the respective tax areas, i.e. you pay NY taxes on NY income and DC taxes on DC income.

I strongly recommend that you get professional tax help when you file for 2008, as your return is a bit too complicated for a layman.