I filed my 2009 NYS taxes in Feb. of 2010. On 4/16/2010 I received a letter from NYS saying that they adjusted my return, basically replacing my itemized deduction with the standard deduction, adding this explanation:
"When your filing status is married filing separately, both you and your spouse must choose to itemize your deductions. Because of this rule we have adjusted your return to allow the standard deduction."

I thought that if we filed married separately that if one itemized then the other would have to as well. I'm just not understanding the clarification. Can someone please explain? Sorry if it's a dumb question.

The rules for itemizing deduction on the NY State return are that (a) you both must have itemized on your federal return, and (b) you both must have itemized on the NY return - see page 73 of: http://www.tax.state.ny.us/pdf/2009/inc/it150_201i_2009.pdf So three questions back to you:

(a) Did you both file as Married Filing Separately on your federal return?
(b) Did you both itemize your deductions on your federal returns?
(c) Did you both itemize deductions on your NY State returns?

ebaines - Thanks for your reply. My wife spoke with her accountant and she did, in fact, take a standard deduction on her returns so the error was on my part for not making sure. Regardless, I thank you so much for responding so quickly. I appreciate it.

Juliangere: Glad you were able to resolve it!