Preparing Community Property Returns for Registered Domestic Partners or Same-Sex Married Couples in California, Nevada, or Washington

Create and name a federal tax return for the first person. We'll enter your personal information and marital status, followed by your income and deductions.

Enter Personal Information and Marital Status 

In the Personal Info tab of Turbotax, enter your information:

1. On the Were You Married? screen, choose Registered Domestic Partnership (RDP) or In a same-sex marriage as appropriate for your situation.
2. On the following screen (in states with an income tax) choose this is the single community property return I will file with the IRS. This is not available in states with no income tax.

Enter Income and Deductions

Complete the Wages & Income, Deductions & Credits, and Other Tax Situations sections.

Enter all of the income and withholding or estimated payments in TurboTax as it was reported to you. Remember, if one person itemizes deductions, both of you must itemize or both must use the standard deduction.

Use the rules for your community property state to determine what adjustments you expect to enter in TurboTax for each person's return. Note that different types of income may be split according to different rules. Often one return has an addition to income and withholding, while the other will have a reduction (subtraction) to income and withholding.

In the Federal Tax tab under Other Tax Situations, select the Done With Other button. You should see a series of allocation adjustment screens only available when filing as RDP or SSM in a community property state.

On the Community Property Income Adjustments screen, enter the adjustment amount you determined from your state rules. This is the amount necessary to adjust your income to your share of the community property.

• Enter any additional income for this return in the Addition Adjustment field
• Enter any income reduction for this return in the Subtraction Adjustment field
  Positive numbers are used for both adjustments
• When done, select Continue.

On the Tax Withholding Adjustments screen, enter the adjustment amount (if any) for your W-2's, Form 1099-s, etc. you determined with the rules for your state. This is the amount necessary to adjust your tax payments to your share of the community property. Estimated tax payments are not included, they are considered separate property.

• Enter any additions for tax withholding from W-2s, 1099s, etc. on this return in the Withholding - Addition Adjustment field
• Enter any reductions for tax withholding from W-2s, 1099's, etc. on this return in the Withholding - Subtraction Adjustment field (enter as negative amounts using a minus sign)
• When done with your entries, select Continue.

If you make an addition in one tax return, there needs to be a matching reduction in the other tax return.

Note: Current IRS rules may not accept e-filed returns when tax withholding payments are allocated between the two individual federal returns in a community property state.

When filing a single federal return in a community property state, this worksheet is required and will be included with your federal tax return. The worksheet shows how the income on this tax return compares with the other taxpayer's return.

1. You will see a series of screens where we ask you to enter your partner's/spouse's community income, deductions, and credits.
   • If applicable, your federal amounts will appear in the first (You) column.
2. Manually enter the amounts from your partner/spouse’s return in appropriate lines of the second (Spouse) column.
3. On the Enter Your Partner or Spouse's Community Income screen, select Calculate Totals after entering your partner/spouse amounts. This generates a third column which displays the totals equalling your combined amounts.

Use these columns to see how the allocation appears compared to the rules you are using. Allocation calculations between taxpayers are subject not only to state law, but to individual circumstances. The split is not necessarily 50/50. Refer to your state tax department for their rules.

You can make changes to the Spouse column, then select Recalculate to show the changes. If your allocation amounts need adjusting, return to the Other Tax Situations page and select Done With Other and review the allocation screens

If you make an addition on one tax return, there should be a matching reduction in the other tax return. The Totals column must show the totals for each line and for your total combined income.

Once you have determined how to split both your combined income and the tax withholding and payments, the amounts shown on the worksheet are figured into your tax return.

Repeat steps 1 to 3 above to complete the spouse/partner's federal tax return for the other half of the adjustments. In the spouse/partner's return:

1. Use the line item adjustments made in the first return from the "Spouse" column of the Enter Your Spouse's community Income screen to make adjustments to the second federal return.
2. Compare the entries on both returns to be sure each return shows the correct offset from the other and the totals add up correctly.
3. Be sure to review your federal returns for completeness and accuracy when you are finished.

Verify each of the individual federal tax returns are complete, accurate, and ready to file. Save both individual federal tax returns.

To file a joint California state return, you must first prepare a mock federal return. Skip to Step 5: File Your State Tax Return By Completing a Mock Federal Return and the State Return.

If you are in Washington or Nevada (non-tax states), you are ready to file your two individual federal returns.

1. Again verify each of the individual federal returns is complete, accurate, and ready to file.
2. Complete the Print & File steps for each federal return, either e-filing or printing and mailing each one.
   Note that current IRS rules may not accept e-filed returns when tax withholding payments are allocated between the two individual federal returns in a community property state.
3. Save both TurboTax files for your records. You should also save electronic PDF files and print paper copies for your records.

If your federal tax returns cannot be e-filed, print the returns with the community property worksheet and mail them into the IRS.

For non-tax state residents, you are done with your federal tax returns.

Currently, California is the only RDP/SSM community property state requiring a state tax return. If you live in a non-tax state, verify and file your federal tax returns.

Once the individual federal returns are completed (the ones you will file with the IRS), we need to create a mock joint federal return containing both individuals tax information. The mock return will be the information source for (and can be filed with) your joint state return. It must Not be filed with the IRS. Be sure to save the original individual federal returns for your records.

If you do not wish to file a joint return and will file separate returns for California, you do not need to continue with the mock federal return. Use your individual federal tax returns to create your state returns. Complete your state returns and skip to the file your returns section below.

Create the mock federal return (California only)

1. Open the individual federal return for the "taxpayer" (the one who is to be the first name on the return). This should be the same person from year to year to avoid confusion.
2. Click on the File menu and select Save As to create a new federal return without affecting the original tax file you opened.
3. In the save dialog, change the original file name by adding something like "mock joint return" to the name, then click Save.

Now you have three federal tax returns; the two individual returns and this new mock federal return. This new return will only be the information source for the state married filing joint return and should not be filed.

Change personal information to a married filing joint return

In the Personal Info tab, change your personal information in TurboTax:

1. Select the Edit button next to the taxpayers name. On the Let's Work on Your Personal Info screen, click Continue.
2. On the Were You Married? screen, choose Registered Domestic Partnership (RDP) or In a same-sex marriage as appropriate for your situation.
3. On the following screen, choose - This is the married return we will use to prepare our resident state return.
4. Then can choose whether you want to file a joint or separate state return.
5. On the next screen, add the information for your partner or spouse.

Continue with the mock federal return by adding the income and deductions from the second person's individual federal return to this mock federal return.

Create the joint state return

The California state program must be installed in TurboTax. Then select the State Taxes tab and continue through the state interviews. Complete all of the interviews and the review checks for the state return.

When the joint state tax return is finished and you have verified the contents, it is ready for filing. But be sure you do not file the mock federal return

File your two individual federal returns and the state return

1. Again verify each of the individual federal returns is complete, accurate, and ready to file.
2. Complete the Print & File steps for each federal return, either e-filing or printing and mailing each one.
   Note that current IRS rules may not accept e-filed returns when tax withholding payments are allocated between the two individual federal returns in a community property state.
3. Open and verify the combined information in the mock federal return and the state return.
4. Step through the Print & File screens, selecting NOT to e-file the mock federal return. For the state return, do select to e-file (recommended) or print and mail.

If your federal tax returns cannot be e-filed, print the returns with the community property worksheet and mail them into the IRS.

Congratulations! Your taxes are done!