Tax liability for spouses all depends on the status of your marriage when your spouse filed that return.
It’s a reasonable question in all sorts of situations: If my spouse owes back taxes am I liable?
The answer hinges on your relationship status at the time your spouse incurred the tax debt. It also relies heavily on whether you filed jointly.
When you file jointly, you assume “joint and several liability,” which means that each taxpayer is legally responsible for a debt.
This table gives you a quick reference of liability based on the status of your marriage. You can learn more about each situation below.
Do you or your spouse owe a lot to the IRS and fear you won’t get caught up? Take a look at our solutions.
|Marriage Status||Tax Liability||What You Should Do|
|Tax debt incurred BEFORE you were married||None – your spouse is solely liable||Apply for Injured Spouse status if you refund gets intercepted to pay the debt|
|Tax debt incurred DURING the marriage in a year where you filed jointly||Potential liability – must prove you had no knowledge of debt and could not be reasonably expected to know, and that you received no benefit from the refund||Apply for Innocent Spouse to get full tax debt forgiveness for any back taxes incurred|
|Tax debt incurred AFTER your separation||If you filed jointly, you may be held liable||Apply for Separation of Liability relief to assume partial liability|
If your spouse incurred tax debt before you married…
You have no liability for tax debt incurred before you entered the picture officially. So, if your spouse owes back taxes from before you got married, then those debts are solely theirs to repay.
As a result, you may qualify for “Injured Spouse” status if the IRS intercepts your refund to cover back taxes for your spouse. If you file jointly and don’t get a refund because the funds went to pay their debt, you can get your part of the refund back.
If you filed jointly the year your spouse incurred the back taxes …
In this case, your liability depends on a few things:
- Did you know about the filing issues that led to the back taxes?
- Are you still together?
- Have you benefited at all from the fraudulent IRS tax return?
If you can prove that you didn’t know your spouse filed incorrectly, you may qualify for Innocent Spouse. However, you must be able to show that you had no knowledge of the understated taxes, and could not have reasonably known.
In addition, you can’t benefit from any refund received for the year your spouse the understated taxes.
However, if you can prove you did not know about the false filing and didn’t benefit from it, then Innocent Spouse may apply. If you qualify, you would enjoy full tax debt forgiveness on any back taxes owed.
If you weren’t together when the filing occurred…
In some cases, joint filings can occur even if you aren’t really together. Maybe you’re still married, but you live apart and are heading for divorce. Your spouse may file jointly because that’s what you’ve always done.
In this case, you can qualify for “Separation of Liability Relief,” which means that you are no longer married and wish to assume partial liability. If you can show you are divorced, legally separated or have not lived together for at least 12 months prior to your claim, then you may qualify.
Understanding the effects of your spouse’s back taxes on a 2019 joint filing
Questions about tax debt that your spouse incurred previously come up often now around tax filing season. One reader found themselves in this situation, which may be similar to yours…
I am trying to figure out if I am liable for my husband’s PAST years’ taxes if we choose to file jointly THIS year. We have been filing separately for many years due to this. He is paying off current tax years as they come but has this past obligation. Will I be liable for the past obligation if we decide to file jointly this year?
Debt.com’s resident tax expert, Jacob Dayan, explains that in most cases, the innocent spouse can file an injured spouse claim if the full refund is taken. This means that the IRS may take your refund, but you can get a portion back based on the income that the innocent contributed that year. The only time this doesn’t work is if you live in a community property state.
First, you’re not liable for your husband’s past debt. But if you file jointly and get a refund, then that refund will be applied to his past debt. However, you may be able to get a portion of that refund back.
Choosing which filing to make can get complicated, so I’d suggest you visit a tax preparer. They can help you analyze both the Married Filed Jointly and Married Filing Separate filing statuses for both you and your husband.
That preparer can determine which status creates the least amount of total tax for your household. If filing jointly will decrease the overall tax, that’s a benefit both you and your husband should be able to take advantage of. Even better, with the IRS Injured Spouse Provision you can still get your portion of the refund!
If you decide to go this route, you will need to file an injured spouse claim on Form 8379 with your tax return this year. That will allow you to keep your portion of your tax refund. Most states that have income taxes have provisions for injured spouses as well. One thing that complicates injured spouse filings is if you live in a community property state.
These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you’re filing a joint return in one of these states, there are exceptions that allow half – or more – of your shared income tax refund to be offset to your spouse’s debt. All states allow 50 percent of the joint refund to be applied to debts such as child support, student loans, or state taxes. Each state varies on how much of a jointly filed refund may be applied to Federal Tax Debts.
Failing relationships make for messy tax situations
If you want to qualify for any of the statuses listed above, be ready for the IRS to get into your business. “Significant benefit” means the IRS will look at your life to see if you got a gift or something else of value. If you want separation of liability, then you’ll need to show you’re really separated.
In addition, when you file for Innocent Spouse, they will contact said spouse to get any “relevant information.” In other words, your former estranged spouse may try to use the opportunity to make sure you’re on the hook, too. If they can show that you knew, then the best you can hope for is a separation of liability.
Q:Am I responsible for my spouse’s tax debt before we were married?
If your spouse owes back taxes when you tie the knot, file separately until they repay the debt. Otherwise you won’t get your refund. If you file separately and the IRS intercepts your refund, then you can apply for injured spouse status. This will ensure you get the money you’re due from your tax returns.
Q:If my husband owes back taxes can they take my refund?
However, just because you are not liable, it doesn’t mean your tax refund won’t be intercepted. Even if you weren’t married when your spouse in incurred the debt, the IRS may intercept your refund now. In this case, you simply apply for injured Spouse status to get the money you’re owed.
If you’re facing problems with the IRS through no fault of your own, connect with a certified tax professional to talk about your options.
Article last modified on February 17, 2020. Published by Debt.com, LLC