My wife took a new job in another state last Mach, 2009 (West Chester, PA) and lives there full time while I am at our other residence (Massachusetts) until our son graduates high school (next year, he is a jr. this year). When he graduates, my sin and I will be moving to where my wife is now. We pay rent on these 2 different locations right now and need advice on how to file this?? Her job was a necessity, as there was no work (what she does) here in Massachusetts. Can we get some guidance?

You definitely need to file a married filing joint on the Federal Income Tax Return. Now for the State tax returns, it is going to be a little complicated as your Wife actually lived with you in MA for the 1st 3 months of 2009.

You would file as a Full Resident of MA as far as you are concerned, but your Wife would file as a Part Year MA resident from 1/1/2009 thru 3/31/2009 and file as Part Year PA resident from 4/1/09 thru 12/31/09.

Be assured, your income would not be taxed in PA, and her PA income would not be taxed in MA. All of your wife's income generated in PA would be sourced to PA state where on her PA State income tax return she would claim all her allowable deductions and credits that she is entitled to.

Also, on the MA tax return, your wife's PA sourced income would be deducted from your joint income and so you would be taxed only on income that you have earned on your W-2 (MA sourced). Her exemptions and credits would be of course prorated based on her period of residency!

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