Injured Spouse or Innocent Spouse Relief
The two can be confusing but are very different.
If you file a joint return and all or part of your refund is applied against your spouses’ past-due federal tax, state income tax, child or spousal support, or federal nontax debt, such as a student loan, you may be entitled to injured spouse relief. To be considered an injured spouse, you must have made and reported tax payments, such as federal income tax withheld from wages or estimated tax payments, or claimed a refundable tax credit, such as the earned income credit or additional child tax credit on the joint return, and not be legally obligated to pay the past-due amount.
If you filed a joint return and you’re not responsible for the debt, but you are entitled to a portion of the refund you may still request your portion of the refund by filing for an Injured Spouse Allocation. Do not confuse Injured Spouse Relief for Innocent Spouse Relief.
In most cases, it is best to file separately from your spouse, but if this is not possible or you filed for a previous year and are seeking relief, we at Sandra King Financial know the steps to resolve this issue.
Taxpayers sometimes get caught up in a serious IRS tax issue; not from their own actions but perhaps because of the actions of a spouse such as their ownership of a business separate from the spouse. Given this situation, the IRS offers what’s known as: Innocent Spouse Relief.
In order to help taxpayers that are being subjected to a tax problem like this, the IRS has developed guidelines whereby a person might qualify as an “innocent spouse”. This means that if it can be proven that you fit into these guidelines, then you may not be subject to the tax problems caused by the current or former spouse.
With the proper documentation, Sandra King Financial can help separate yourself from your spouse’s tax issues not just for one year, but permanently.