Grand Rapids Part Year Return

[david3]

TPs were married in December 2019. The TP was a CO resident the full year and the spouse was a MI resident who lived in Grand Rapids until March 2019.

The MI tax return allows a nonresident checkbox for the TP and a part year resident for the spouse.

However, the Grand Rapids city tax return will not let me indicate the TP was a nonresident and the spouse was a part year resident. An error message appears when I try to select Part-year resident in the MI Information Wks Part II City Resident Status. The message says that nonresident status was selected for the MI return and the Grand Rapids return has to be filed as nonresident also.

How do I correct this to allow the TP to be filed as a Grand Rapids nonresident and the spouse filed as a Grand Rapids part-year resident?

Thank you.

[sjrcpa · Accepted solution]

Can you just file a part year return for the spouse?

And maybe do it outside the software.

[david3]

Yeah, I'm thinking I may have to do that.

I was hoping that since the PS software threw the city tax return in there that there would be a way to get it done through PS.

For anyone familiar with the Grand Rapids city return - if I file the city return for only the spouse outside the PS program then she will only get the exemption for herself and not for both TPs. Since the TPs are filing MFJ federal tax return then shouldn't the city tax return allow the exemption for both TPs?

Thanks for your help.

[BobKamman]

Questions like this always make me feel sorry for taxpayers who live in Rust Belt states where cities have an income tax -- that usually goes along with high property taxes.  I feel sorry for their tax practitioners also, even if it means extra income. 

You can't tell her not to file, but what happens if she just ignores the city tax?  Is that a city where they withhold the tax anyway, so it's a zero-balance return?  Do they send auditors across the country to track down delinquent returns?  

Grand Rapids (not that one in MN, the other one in MI) -- nice place to visit, don't miss the Gerald Ford Museum, but I wouldn't want to live there.  

[david3]

City taxes are withheld from her W-2. She will owe $42 if she files a return for just herself, as suggested.

BTW she is a new client and a city tax return wasn't filed for prior years. The Grand Rapids city tax return instructions are clear that she is required to file a return, even if she is a part-year resident.

I would think she should be allowed to file MFJ return since she was married as of 12/31/19. However, the instructions aren't clear about filing when one spouse was a part-year resident and the other was a nonresident. If anyone is familiar with the Grand Rapids city tax return can you let me know if the TPs will get only the $600 exemption for her or if they will get the $1,200 exemption for both of them since they are filing a MFJ federal and MI tax return?

Thank you for your help.