Contributed by PhillipB, FreeTaxUSA Agent, Tax Pro
There are certain government and legal debts that can be garnished from a federal income tax refund. These debts include:
- Past due federal or state income tax
- Student loans in default
- Unpaid back child support
- State unemployment compensation
- Other federal non-tax debt
Without the injured spouse allocation form, the federal government can take the entire refund from a married filing joint tax return regardless of whether both spouses are responsible for the debt.
The injured spouse allocation allows the spouse that is not liable for the debt (the injured spouse) to receive their portion of the joint tax refund. The form must be filed annually while the previous debt of the spouse remains.
The IRS takes approximately 11 weeks to process an electronically filed joint tax return with the injured spouse allocation. The form may also be filed separately after a joint tax return is filed.
How do I fill out Form 8379 with FreeTaxUSA?
Finish your return until you reach the section labeled “Misc” and follow this menu path:
- Click Misc > Deductions/Credits > Injured Spouse Allocation (Form 8379)
- Choose the injured spouse (the non-liable spouse)
- Verify the injured spouse is not liable for the past due debt, and answer whether you live in a community property state or not.
- Follow these general guidelines for allocations:
- Allocate income to who earned the income. If the income is earned jointly, divide the income between you.
- Divide the standard deduction between the spouses.
- Allocate itemized deductions by who paid for the deduction. If the itemized deductions are paid for jointly, divide the deductions between the two.
- Divide credits by who has the right to the credit. For example, if there is a child from a prior marriage on the return, assign the credits related to that child to the child’s actual parent. If you and your spouse are both the child’s parent, you will need to choose who keeps the child tax credit on their side. Child related tax credits for one child can’t be divided.
- Payments and other taxes like self-employment tax, withholding tax refundable credits (not including the earned income credit), and estimated payments should be divided by who is liable for other taxes, who paid the taxes, and who is entitled to the refundable credits.
- Review the allocations on the Injured Spouse Summary screen.
Community Property
The allocations are a little bit different if you live in one of the following community property states:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
In most cases, community property injured spouse allocations work as follows:
- Income, deductions, credits (besides the child or dependent-related tax credits), federal income tax withholding, and estimated tax payments will be divided in half.
- The dependent-related credits (such as the child tax credit, the dependent care credit, and education credits) will be allocated on a per child basis (i.e. if there is one child, the full child tax credit can only be allocated to one spouse).
- Self-employment tax is allocated to the self-employed person.
- Retirement-related penalty taxes are allocated to the spouse who incurred the penalty.
- The other items included in Other Taxes are mostly allocated at 50% to each spouse.
