Here’s the scenario:
You and your spouse filed Married Filing Jointly on your tax return. You are waiting for your tax refund. Instead, you receive a letter explaining that your refund will be used to pay an outstanding debt. The refund will be used to pay a past-due debt owed by your spouse. The types of debts that will be paid from your tax refund are:
- Delinquent child or spousal support
- Federal student loan debt
- Past-due federal income taxes
- Unpaid state income taxes
- State unemployment debts
If the debt belongs to only one spouse, the other spouse (injured spouse) may be able to get back part of the refund by filing an injured spouse claim. The injured spouse claim can be filed if the debts occurred before the taxpayers were married or when they filed separately.
Do you qualify to file as injured spouse?
The taxpayer has to meet THREE conditions to qualify for injured spouse:
- The injured spouse is not required to pay the past-due amount since the debt was incurred solely by the other spouse.
- Both spouses reported income on the joint return for the year the refund is being withheld.
- Both spouses made and reported payments (federal income tax withheld from wages, made estimated payments).
Form 8379, Injured Spouse Allocation
An injured spouse can claim their share of the tax refund by filing Form 8379 as soon as they know that their refund is being used to pay a spouse’s past-due debt. Form 8379 can be filed with the joint return, or on its own after the joint tax return has been filed.
Form 8379 has four parts:
- Part I asks yes-or-no questions to determine if an injured spouse claim exists and how to proceed.
- Part II requires information about the joint tax return.
- Part III allocates the items on the joint return between the spouses calculating the refund due to the injured spouse.
- Part IV must be signed and dated by the injured spouse when Form 8379 is filed by itself, not with the joint tax return.
If you are experiencing an injured spouse tax issue and need assistance, Peoples Tax has expert tax professionals on staff that can help you! Give us a call at (804) 204-1040 or email us today to find out how we can assist you!
If you’re in Richmond, Virginia (RVA), we can meet at one of our RVA tax offices. If you are further away, we can handle your issues remotely by phone, email, Skype, our virtual portal and more!