Alabama allows married taxpayers who file a Married Filing Jointly (MFJ) federal return to elect Married Filing Separately (MFS) status for Alabama purposes. This allows each spouse to report their own income, deductions, withholding, and tax items on separate Alabama returns.
Pathway to this entry is:
Alabama State Return > Basic Information > Change Filing Status from MFJ to MFS for State Purposes Only
When Should I Complete This Section?
Complete this section if:
- You filed a joint federal return.
- You want to file separate Alabama returns.
- You need to allocate income, deductions, withholding, and other tax items between spouses for Alabama purposes.
This election affects only the Alabama return and does not change your federal filing status.
How Does Alabama Calculate Separate Returns?
When filing separately for Alabama purposes, each spouse must report their own share of:
- Income.
- Adjustments to income.
- Deductions.
- Exemptions.
- Tax withholding.
- Estimated tax payments.
- Credits and other tax benefits.
Amounts should generally be reported by the spouse who earned the income, incurred the expense, or received the payment.
How Do I Allocate Income Between Spouses?
Income should generally be reported to the spouse who earned or received it.
Examples include:
Income Typically Allocated Separately
- Wages and salaries.
- Interest income from individually owned accounts.
- Business income from a sole proprietorship.
- Retirement income belonging to one spouse.
- Rental income from separately owned property.
Joint Income Items
Certain jointly owned income items may need to be allocated between spouses based on ownership interests or applicable Alabama rules.
How Do I Allocate Deductions and Withholding?
Deductions and withholding are generally allocated to the spouse who paid the expense or had the withholding reported on their income document.
Examples include:
- State withholding reported on a spouse's W-2.
- Estimated tax payments made by a specific spouse.
- Business expenses attributable to one spouse.
- Itemized deductions paid by a specific spouse.
Maintain records supporting all allocations.
What Happens to My Exemptions?
Alabama allows personal and dependent exemptions when filing separately, subject to Alabama requirements.
The exemptions claimed should reflect the dependents and exemption amounts properly attributable to each spouse.
Can One Spouse Itemize and the Other Take the Standard Deduction?
No.
If married taxpayers file separate Alabama returns, both spouses must use the same deduction method.
Pathway to this entry is:
Alabama State Return > Basic Information > Married Filing Separate on the AL Return, Ability to Force Either Standard or Itemized Deductions
If one spouse itemizes deductions, the other spouse must also itemize. If one spouse claims the standard deduction, the other spouse must also claim the standard deduction.
How Does Filing Separately Affect My Return?
Electing Married Filing Separately for Alabama purposes may:
- Increase or decrease Alabama tax liability.
- Change deduction amounts.
- Affect exemption calculations.
- Change available credits.
- Increase or decrease a refund.
- Increase or decrease the amount owed.
The impact varies depending on each spouse's income and deductions.
What Information Will I Need?
You may need:
- Forms W-2 and 1099 for each spouse.
- Information regarding separately owned income and property.
- Records supporting deductions.
- Estimated tax payment records.
- Withholding information.
- Documentation supporting dependent claims and credits.
Important Information
- This election changes your filing status for Alabama purposes only.
- Your federal return remains Married Filing Jointly.
- Income, deductions, withholding, and payments must be allocated between spouses.
- Both spouses must use the same deduction method when filing separate Alabama returns.
- Review all allocations carefully before filing.
- Keep records supporting your allocations with your tax records.
Additional Information
Some taxpayers may benefit from filing separately for Alabama purposes, while others may not. Because the result depends on each spouse's income, deductions, and credits, review the completed returns carefully to determine whether Married Filing Separately provides the most favorable Alabama tax outcome.