Spouse Tax Adjustment
Please try the Spouse Tax Adjustment Calculator below.
You must be filing a joint return and both you and your spouse must have income. Have your federal tax return and, if applicable, a completed Virginia Schedule ADJ ready.
What is the adjustment and who may be eligible?
Married couples who file a joint Form 760 may be eligible for an adjustment of up to $259 against their joint income tax liability if each spouse received income during the taxable year. With this adjustment, two-income couples who file a joint return owe no more tax than the combined tax that would be due if separate returns were filed. Joint taxable income must be over $3,000 and both parties must have Virginia Adjusted Gross Income to benefit from this adjustment.
FOR EXAMPLE: One couple's combined Virginia income is $42,000. The Virginia tax is $2158. Suppose one spouse's income is $30,000 and the other spouse's income is $12,000. Using the Spouse Tax Adjustment to report their separate incomes, their total tax computes to $1937. Simply by using this Spouse Tax Adjustment worksheet they would benefit a savings of $221 in taxes!
How is the adjustment calculated?
Virginia's income tax is imposed at graduated rates, starting at 2% and capping at 5.75%. The highest rate applies to income over $17,000. When a married couple chooses to file a joint return (Filing Status 2), they report their income together in the same column on the return. The first $17,000 of their total taxable income is then taxed at the lower rates, with the remainder being subject to tax at the rate of 5.75%. If a couple elects to use the Spouse Tax Adjustment, they calculate their income tax separately using the Spouse Tax Adjustment worksheet. As a result, the first $17,000 of each of their incomes will be taxed at the lower rates. Consequently, using the Spouse Tax Adjustment can result in a tax savings of up to $259.
Last Updated 10/26/2013 20:17