married living in 2 different states

need some help/advice

my wife lives in PA and stopped working full time in Mar 06 to take care of our new baby. I live and work in NY full time. I know we can file federal jointly but what to do about state tax filing? I would like to claim both as full dependents now that she is a SAHM. Can she file seperately in PA and I can claim her as a dependent also along with our daughter? We have no mortgage interest to deduct yet and I itemize deductions for work related expenses. Should we continue to file seperate state and federal taxes?

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Reply to
ghomarch
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In both PA and NY, you can each file your own separate, full-year resident return, or you can elect to file jointly. If you choose to file jointly, you will file as if both of you were full-year residents of the state. If one spouse has significantly less income than the other, you may find that a joint return gets you a better result in NY, but maybe not in PA. The only way to tell is to calculate the taxes both ways in each state. You are not bound in either state by the election you made in the other. However, if you include your NY source income in a PA return, or your wife's PA source income in a NY return, you can claim a credit from the state that taxes the income on a residence basis for the tax paid to the source state. Beware; you may have residence issues. It is uncommon for spouses who are not separated to have different domiciles, and both NY and PA define tax residence to include all individuals domiciled in the state. Ordinarily you would be domiciled where your wife and infant child live, or vice versa. The domicile of each of you would be determined with reference to all of the facts and circumstances, and it is certainly possible that you have separate domiciles, but it would be unusual. Katie in San Diego

Reply to
Katie

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