What Is a community property state?
In a community property state, most property and income earned during a marriage is considered jointly owned by both spouses. If the couple divorces, annuls the marriage, or one spouse passes away, the property is typically divided equally.
These laws also apply to Registered Domestic Partners (RDPs) in certain states, such as California and Washington.
These states follow community property laws, meaning that most property acquired during a marriage is considered jointly owned by both spouses:
- Arizona
- California
- Idaho
- Louisiana
- Nevada*
- New Mexico
- Texas*
- Washington*
- Wisconsin
* These states follow community property laws and do not impose a state income tax.
How does this affect taxes?
Under federal tax law, the rules of your state determine whether your income and property are considered community or separate.
If you file your federal tax return separately from your spouse:
- You must report half of all community income and all of your separate income.
- RDPs must do the same: report half of the community income and all of their own separate income.
Your state of domicile (where you legally reside) determines whether you have community or separate income for federal tax purposes.
How do I allocate our income?
If a taxpayer in a community property state files a Married Filing Separate (MFS) tax return, you are required to complete the MFS allocation. This is where you'll enter your spouse’s tax information. To find this form go to:
- Federal Section
- Miscellaneous Forms
- Allocation of Tax Amounts for Individuals in Certain States
For Registered Domestic Partners (RDPs), you’ll file separate federal returns, but combine your income only on the state return, if required by your state.
What Is community property?
Community property generally includes:
- Income and assets acquired by either spouse (or RDP) during the marriage while living in a community property state.
- Property that was originally separate but later agreed to be treated as community property.
This applies to RDPs in states like California and Washington, where community property laws extend to same-sex partners.
For more information about community property see Publication 555 and Form 8958 Allocation of Tax Amounts Between Certain Individuals in Community Property States. Form 8958 instructions can be found within the article How do I complete the married filing separate allocation?