MFJ moved from MO to PA

Temptingtoothbrush

Hi, I plan to file my federal taxes as MFJ. However, I moved from MO to PA in March of this year, and my wife moved from MO to PA in July. I had a job in MO in January and left that role, before accepting a new job that paid me in MO (from Feb - March), and then in PA for the rest of the year. My wife left her role in MO and started a new role in PA. How would we report this using FreeTaxUSA software, and given MO's rules regarding filing with the same status? Thanks

GeorgeM

Hello Temptingtoothbrush:

Perhaps your only option for tax year 2025 is to file as Married Filing Separately on your federal, MO, and PA tax returns. You are correct in that the filing status on your MO tax return must match the filing status on your federal tax return. Thus, if you were to file jointly on your federal tax return, our software would treat both of you as full-year MO residents rather than as part-year residents. A similar outcome would occur on your PA tax return.

If you decide to file as MFS for tax year 2025, you will need to create multiple accounts for each of you in FreeTaxUSA. One account for your respective federal tax returns, and then separate accounts for your respective MO and PA tax returns.

Given your different residency periods in MO and PA, when preparing those tax returns, you will likely need to allocate your income to each state based on your residency period. Both jurisdictions understand that the Box 16 amounts on a W-2 may not always be accurate, and thus, the taxpayer must be able to support whatever allocation they deem is appropriate.

Arguably, MO gives the part-year taxpayer some flexibility regarding taxes in that it allows the part-year taxpayer the option of selecting a credit for taxes paid to another state, or the option of paying taxes on the percentage of income earned while a Missouri resident. The taxpayer can select whichever option provides the best tax outcome.