If you are filing a joint Federal income tax return and either have had, or expect to have, your refund withheld to offset a tax debt owed by your spouse but not you, you might be eligible to submit a claim for Injured Spouse Relief. This claim can be attached to your tax return if you have received advance notification that your refund will be withheld to pay your spouse’s tax debt. If no advance notification has been received, the claim for Injured Spouse Relief can be filed once you know your refund has been intercepted.
In general, you are not responsible for a tax debt incurred by your spouse before marriage. After the marriage, if your refund is intercepted to cover such a tax debt, you are probably eligible to file a claim for Injured Spouse Relief. You may also meet the eligibility requirements for this claim if your refund was withheld to cover a defaulted or foreclosed student loan debt acquired by your spouse before the marriage or to cover his or her back child support payments for children from a previous marriage. An Injured Spouse Relief claim does not apply to any tax due from a return that was submitted as “married filing jointly.” Any such tax debt is owed by both parties so neither spouse can claim injury if a refund is later withheld to cover it.
The following three conditions must be met to qualify with the IRS for Injured Spouse Relief:
- Some or all of the income reported on the joint return from which the refund was withheld must have been earned by the injured spouse. This income can also include income from investments owned by the injured spouse.
- The tax payments made by the injured spouse including tax credits, income tax withheld from wages and estimated tax payments must have been reported on the joint return from which the refund was withheld.
- The debt in question must be one for which only the spouse is liable. This usually represents a state or federal income tax debt incurred before the marriage but can also include delinquent child support payments owed to a former spouse or a debt due to a defaulted or foreclosed student loan.
If a claim for Injured Spouse Relief is accepted, the IRS will use a formula to calculate the percentage of the refund owed to the spouse submitting the claim. This calculation will include any tax withheld from income earned by the injured spouse plus pro-rated portions of any estimated tax payments or income tax credits.
If your income tax refund has been witheld to cover an outstanding tax debt incurred by your spouse before marriage, we can help you determine whether you qualify for Injured Spouse Relief or one of the other forms of spousal tax relief offered by the IRS. These other programs include Innocent Spouse Relief, Separation of Liability Relief and Equitable Relief. The eligibility criteria for all IRS tax relief options are very specific so selecting the appropriate one may require the assistance of a knowledgeable tax professional. Following the determination of which form of spousal tax relief best fits your specific situation, we can help you get all forms and documentation submitted according to established IRS guidelines.
For more information about our tax relief services, visit us at www.professionaltaxresolution.com. Contact us today at (949)-596-4143 or info@protaxres.com to receive a free, no obligation consultation.