Arkansas Non-Resident Return is marking MFJ client as MFS

[t-l_porter]

Client's federal tax return and resident state return are showing married filing jointly, but the AR return shows married filing separate.  Instructions for Form AR1000NR do not list any provisions why they would have to be listed as separate, even if only one spouse had work in AR.  Unable to find any overrides/options that would correct this issue.  Is anyone aware of a work-around or is this a product issue?  Because AR demands the federal return in conjunction with the state return for non-residents, concerned that this will cause an issue when it seems that there is no reason why the client should be listed as MFS.

[itonewbie · Accepted solution]

Are you referring to Status 4, MFS on the same return, rather than 5 (which is MFS on separate returns)?  If both the t/p and s/p have income, this may just be PTO optimizing the filing position as the instructions also note that this may reduce the tax liability.

[t-l_porter]

Client has no tax liability in AR, as the income generated instate was only a few bucks.  Either way, the filing position will not change liability, but I'm still uncomfortable with the forced change. 

[itonewbie]

But there's no force change. Status 4 is totally legit.

[NW Accountant]

I'm curious if you ever found more info on this. I am working on an Arkansas return and cannot find a place in Lacerte where I can indicate that they are MFJ on the state return. I think its great that Lacerte would automatically select the filing status that would result in the greatest tax benefit to the client but I would like to be in the know as to how that determination was made and see the comparison myself. Thanks!