Back in July of 2000 in the message
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I questioned whether a MFS requirement for a non-resident found in North Carolina instructions was actually contained in a North Carolina statute. When the usual suspects weighed in on the side of North Carolina, they overlooked one VERY IMPORTANT CONSIDERATION. One of the "suspects" actually identified that VERY IMPORTANT CONSIDERATION in comments related to another issue posted in another thread in this group earlier this year. Anyone, other than Katie in San Diego, care to opine on what VERY IMPORTANT CONDSIDERATION was overloked? Nevertheless the question that I raised is now moot! The North Carolina legislature has now amended G. S. 105-152(e). Here is the new version of G.S. 105-152(e). (e) Joint Returns. -- A husband and wife whose federal taxable income is determined on a joint federal return shall file a single income tax return jointly is each spouse either is a resident of this State or has North Carolina taxable income and may file a single income tax return jointly if one spouse is not a resident and has no North Carolina taxable income. ... I don't know what caused the North Carolina legislature to change the statute but my impression is that it is very unusual for state legislators to change a law that only produces a negative impact on those who can not vote them out office. So I don't know whether it was that VERY IMPORTANT CONSIDERATION or my comments, in passing, to a prominent member of the NC General Assembly that led to the change in the statute. Previous, prior to tax year 2006, North Carolina Law / instructions provided: Section 105-152 e) Joint Returns.-- A husband and wife shall file a single income tax return jointly if (i) their federal taxable income is determined on a joint federal return and (ii) both spouses are residents of this State or both spouses have North Carolina taxable income. ... Translation from the 1999 North Carolina Instructions for Individual Income Tax: Page 3
You and your spouse must file a joint North Carolina return if you filed a joint federal income tax return, and both of you were residents of North Carolina or both of you had North Carolina Taxable taxable income. All other individuals must file separate returns. Page 5
If you filed a joint federal return but cannot file a joint North Carolina return because your spouse is a nonresident and had no North Carolina taxable income, you must calculate your federal taxable income as a married person filing a separate return. Complete either a federal return as married filing separately reporting as only your income, exemptions, and deductions, ... While the law clearly requires the filing of a joint North Carolia return if a joint Federal return was filed and both spouses had North Carolina income regardless of resident or nonresident status, the law appears to be mute on whether or not a nonresident couple who filed a joint Federal return files a joint North Carolina return or the one with North Carolina income files a separate return. Where in North Carolina law does it say that a separate return must be filed by a nonresident if he/her filed a joint Federal return with spouse and he/she was the only one that had North Carolina income? Cheers,
WDK
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