Question: if my spouse and I file our federal tax return as married filing jointly, can we file separately in Iowa? What about filing separately on the federal return but jointly in Iowa?
Answer: the short answer is yes, this is okay but with a few catches.
Iowa Filing Statuses
Iowa offers three filing statuses for married couples:
- Married filing jointly
- Married filing separately on a combined return
- Married filing separately on separate returns
I’ve written about this before so won’t go into more details here.
A married couple can choose any of these 3 statuses regardless of how they filed their federal tax return. So a couple can file jointly on the federal return but separately in Iowa, or vice versa.
There are certain items that I believe would need to be taken into account on the Iowa return, especially if your federal filing status was married filing separately.
For example, I believe the following is true (based on discussions I’ve had with Iowa Department of Revenue … the instructions to the Iowa 1040 aren’t clear on this):
- If you had student loan interest or paid college tuition, those things would not be deductible on the Iowa return if you filed your federal tax return as married filing separately. The reason being, those deductions are not available when filing separate federal returns, so you wouldn’t be able to take them on your Iowa return. The Iowa deduction for those items is tied to what was actually deducted on the federal return. If you filed separately, you got no federal deduction and thus get no deduction in Iowa, regardless of your Iowa filing status.
What About Dependents
The question of who can claim the kids on separate Iowa tax returns is often asked. This is worthy of its own blog post down the road.
Generally, it doesn’t really matter who claims the kids but again, there are some catches that need addressed in a separate post.