[baovle]

In 2007, I lived and worked in Connecticut and had the CT state tax withheld. My wife lived and worked in Massachusetts and had the MA state tax withheld. My wife supports her dad and our son and both of them live with my wife in MA.

I want to file married jointly for 2007 federal tax and claim both her dad and our son as exemptions. I hope this is allowed.

How should we file for state taxes?

Thanks for the help!

[ebaines]

Filing as Married filing jointly for your federal return should be no problem. As for claiming your father-in-law as a dependent - that will work if he meets the tests as a "qualified relative," which means:

1. His gross income is less than $3,400
2. You and your wife provide at least half his support.

You son is a dependent as long as he meets the qualified child rules:
1. He is under 19, or under 24 and is a full-time student.
2. He must have lied with you or your wife for at least half the year (exception: if he is away at school that counts as time at home)
2. You and your wife provide more than half his support.

As for filing in CT and MA - MA says that if you and your wife weren't both residents of MA then you can't file jointly, so it seems your wife would file as Married filing Separately. As for CT, it seems you have a choice - from their instruction booklet:

When one spouse is a Connecticut resident and the other
spouse is a nonresident, each spouse who is required to
file a Connecticut income tax return must file as married
filing separately or civil union filing separately unless:
• They file jointly for federal income tax purposes. This
requirement does not apply to civil union partners; and
• They elect to be treated as if both were Connecticut
residents for the entire taxable year.

I think you will find it easiest to file as MFS in CT, given that your wife is a non-resident. That way she reports her income to MA, you report your income to CT, and be done with it.

[baovle]

Thank you very much for this tax advice. I do want to clarify a couple points.

For the 2007 federal return, I plan to file as MFJ and on claiming dependents:

1) my farther-in-law lives with my wife in MA. His income is less than $3400. Only my wife provided over half his support.

2) My son was born in 2007 and lived with my wife in MA. We both provided over half his support.

Can I claim the two as dependents even though I don't live with them, especially my farther-in-law, I don't provide support to him; only my wife does?

I think when filing as MFJ on the federal return, it doesn't matter who files it: either me or my wife, we are treated as one unit so when the test refer to "you" (live with you, did you provide half the support, etc.) either one of us can represent it. I have a hard time finding this clarification in publication 501.

[ebaines]

Can I claim the two as dependents even though I don't live with them, especially my farther-in-law, I don't provide support to him; only my wife does?

I think when filing as MFJ on the federal return, it doesn't matter who files it: either me or my wife, we are treated as one unit so when the test refer to "you" (live with you, did you provide half the support, etc.) either one of us can represent it. I have a hard time finding this clarification in publication 501.

To be clear: you should understand that it is not just one of you filing the form when you file as MFJ. As MFJ you are both filing one common form, reporting the total of both your incomes, exemptions, deductions etc. And you both sign the one form.

[baovle]

Can my wife file as head of household for the MA income tax return, since both her dad and our son live with her and she provide the support?

[ebaines]

No - not unless she filed as Head of Household on her federal return. From the MA website:

Taxpayers must qualify and file as head of household on their federal returns in order to qualify and file head of household on their Massachusetts returns.

Since you are filing as MFJ for federal purposes, she can't file as Head of Household for MA.

[baovle]

One additional thing for 2011:

I own a home in CT and my wife owns a home in MA. We're going to file Married filing jointly in Federal return so we should be able to claim both homes, correct?

When filing under State we are going to choose Married Filing Separately, how do we claim for properties?

Thanks,
Bao

[ebaines]

I own a home in CT and my wife owns a home in MA. We're going to file Married filing jointly in Federal return so we should be able to claim both homes, correct?

Bao: Welcome back to AMHD! Yes - on your federal return you can claim property tax and mortgage interest deductions for both homes, subject to the usual requirements.

When filing under State we are going to choose Married Filing Separately, how do we claim for properties?

For CT income tax the property tax credit is figured on Schedule 3. The amount of the credit is dependent on your AGI and filing status - see the instructions for schedule 3 starting on page 29 of the CT-1040 instructions, available here:
http://www.ct.gov/drs/cwp/view.asp?a=1509&q=443614

For MA there is a property tax credit available to your wife is she is over 65. There are also several other credits available - see: http://www.mass.gov/dor/individuals/...e-tax/credits/

[baovle]

Thanks ebaines for your timely response and helpful answer as always.

I just want to clarify: on my CT filing, I should be able to claim my home in CT for credits. Likewise, for my wife's MA filing, she should be able to claim her MA home for credits?

Also, my wife is not over 65.

[ebaines]

Yes - you would claim credits for the CT residence and your wife would claim for her MA residence. Of course this assumes that you each qualify for whatever credits you think you can claim, per the rules of CT and MA.

[baovle]

My wife (who lives in MA) did refinance her MA home, but since we were filing jointly on the federal return, I was required to co-sign on her refinance. Is she still able to claim credits for her MA home when filing separately on her state return?

[ebaines]

Yes, she can claim the credits - the fact that you co-signed the mortagage does not affect her ability to claim whatever credits she is entitled to.