Injured Spouse Relief
When you are married, and the IRS has applied a refund from your joint return to cover your spouse's liability you can file a claim for injured spouse relief to recover your share of the refund. Also, if you are filing a joint return now and you’re not previously responsible for the debts of your spouse you can file an injured spouse claim to get your portion of the refund instead of applying your portion of the refund to your spouse's liability.
Liabilities in which the IRS can claim a tax refund, in addition to outstanding federal taxes, include:
- Student Loans
- State Income Taxes
- Child Support
- Unemployment compensation debts owed to a state
Injured Spouse Relief is most commonly mistaken for Innocent Spouse Relief, but the two programs are distinct. Injured Spouse involves one party of a joint refund seeking to be pardoned from the IRS seizing the entire refund to pay the other party’s debt. If a taxpayer is entered into the Injured Spouse program, he or she can be absolved from having to pay their spouse’s debt with their portion of the tax refund.
The share of the refund is determined by allocating the wages, tax credits, and deductions for each spouse. Items that are shared between both parties, like interest from joint bank accounts, would be divided equally.
There are exceptions and exclusions for Injured Spouse, and some states in the US have rules that do not allow a spouse to be separated from their spouse’s debts when filing a joint return. Contact us now to see if you qualify for Injured Spouse Relief.