[igorgoga]

Husband works and rent primary residence in MA. Wife works in NY and lives in their house in NY. Husband makes 3 time as much as wife per year. They have 2 dependent-kids. They file joint federal return. How should they file state returns? How do they split deductible for dependents?

[MukatA]

If you file joint federal return, normally you must file joint state tax returns.
On MA tax return, husband is resident and wife is non-resident.
On MY tax return, wife is resident and husband is nonresident.

[igorgoga]

If you file joint federal return, normally you must file joint state tax returns.
On MA tax return, husband is resident and wife is non-resident.
On MY tax return, wife is resident and husband is nonresident.

Thank you. This is clear. What to do with dependents? Who should take deduction for them?

[AtlantaTaxExpert]

Since they are filing jointly, the dependents are claimed on ALL returns (federal, NY, MA). The exemptions MAY be pro-rated on the state returns, but NOT on the federal return.

[igorgoga]

Dear AtlantaTaxExpert,
Please explain... What do you mean by "MAY be prorated"? Can bot spouses deduct both kids? If "yes", it seem counterintuitive, since dependenp are being deducted twice.

Thanks

[AtlantaTaxExpert]

My last post assumed that you are filing a SINGLE, JOINT return for the IRS and each state, NOT separate returns.

If you choose to file Married Filing Separately (which, given the difference in the amount of income earned, MAY be the best way to file), then you can determine which parent should claim one or both children on their respective federal tax return.

The decision on which child goes to which parent's tax return would then also apply to the respective STATE tax return.