Filing status

[athaureaux6]

Hi online community, I would like your input on this situation: 

I had a couple today, both retired with pension income and social security income. But the problem is that they are married but one lived in NY and the other in NJ. One received pension and social security from NJ and the other received pension and social security from NY. How do you handle the states returns in this case. They file MFJ for the federal. Specially how would you do it in the Proseries Professional software. 

Thank you 

[Skylane]

File MFJ federal and MFJ  part year resident in each state allocating the appropriate income to each state. 

[athaureaux6]

How can you file part of the year? One spouse is a full year NJ resident and the other spouse is a full year NY resident. There is not part of the year situation in my opinion. 

[athaureaux6]

After researching the NJ and NY Division of Taxation, the NJ GIT-4 states there is a special circumstance specifically for this situation where the NJ resident taxpayer can file a MFS state return after filing a MFJ federal return, that part is clear to me now. But how would you do that in Proseries to be able to send the return electronically. Proseries will not allow to change the status in the NJ return. I may have to send the states by paper and attached an explanation mentioning the special circumstance listed in the NJ Division of Taxation. Any thoughts will be appreciated. 

[IntuitAmyC2]

Follow these steps since NJ allows separate filing:

1.  File the federal return
2. Use the Split MFJ Return Tool:  
   1. Go to the File menu and select Split MFJ Return.
      • ProSeries will create two new, separate client files (one for the Taxpayer, one for the Spouse).
      • Note: If you are in ProSeries Basic, you'll have to do a Save As and manually delete the other spouse's data.
3. Prepare the "State-Only" File:
   1. Open the new MFS file for the NJ resident spouse.
   2. On the Federal Information Worksheet, ensure the filing status is Married Filing Separately.
   3. Crucial Step: In the Electronic Filing section (Part VI), uncheck the box for Federal e-file and check the box for New Jersey e-file. This allows you to transmit the NJ return as a "State-Only" (unlinked) return.
4. Attach the Explanation:
   1. Since you are filing MFS after an MFJ federal return, NJ often looks for the "Special Circumstance."
   2. In the NJ resident return, look for the NJ-1040 "Notes" or "E-file Attachments" section. You can often attach a PDF labeled "GIT-4 Disclosure" or "Filing Status Explanation" to the electronic transmission to prevent a kickback or manual review letter later.