Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
04-21-1999
April 21, 1999
Re: Request for a Ruling: Individual Income Tax
Dear**************
This will reply to your letter in which you request a ruling on the allocation of exemptions and deductions between spouses domiciled in different states. I apologize for the delay in response.
FACTS
A Virginia domiciliary Taxpayer, who is in the military, is stationed in State A. The Taxpayer's spouse is a domiciliary of State B. The Taxpayer and spouse file a joint federal return. The Taxpayer files a separate return in Virginia. The spouse files a nonresident return in State A and a resident return in State B. Exemptions for the children were claimed on the spouse's income tax return in State B. Neither the Taxpayer nor the spouse claimed child care deductions eligible for the federal credit for household and dependent care expenditures.
The Taxpayer has requested a ruling on whether he may claim exemptions for children and child care deductions on the Virginia income tax return. The Taxpayer also asks whether the children's residency will influence where the exemption and deduction may be claimed.
RULING
Code of Virginia § 58.1-322 (D), copy enclosed, permits Virginia residents to deduct $800 from federal adjusted gross income (FAGI) for each federal personal exemption allowed. It also permits Virginia residents a deduction from FAGI for expenses for which the federal credit for household and dependent care expenditures is based.
In a case where each spouse in a married couple is a domiciliary or actual resident of different states and file separate state income tax returns, income tax deductions and personal exemptions must be accounted for separately by each spouse. If the couple is unable to separately account for these deductions and exemptions, they must be allocated proportionally between each spouse based on income attributable to each. See Title 23 of the Virginia Administrative Code (VAC) 10-110-190(B), copy enclosed.
The exemptions for the children have already been accounted for separately since they were claimed on the spouse's State B return. The child care deductions may be allocated between the Taxpayer and spouse as they mutually agree, or they must be allocated proportionately between the Taxpayer and spouse based on attributable income.
I hope that this ruling answers your questions. If you have any questions about this ruling, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13874B
Rulings of the Tax Commissioner