The IRS allows for married taxpayers to pool their income together and deduct expenses as a couple. Generally speaking, if individuals file using a Married Filing Joint status, they will pay less in taxes than if they were to file Married Filing Separate.
A potential drawback of the joint filing status is that a couple’s entire tax refund may be offset, or applied, against a past due balance that only one spouse is liable for.
If this is the case, then does the non-liable spouse have any recourse?
They do. The IRS encourages the non-liable spouse to send in Form 8379, Injured Spouse Allocation, along with their joint tax return. The spouse who is not liable is considered potentially injured if their portion of the refund is applied against their spouse’s delinquent debt.
What kind of debt is paid?
The IRS will keep any refund when either taxpayer on a joint return has a past due balance owing on a prior year tax return. This is true even if the liable taxpayer has established a monthly repayment plan and is currently making timely reimbursement. Any time a taxpayer owes a debt to the IRS, the Service will apply the refund to the delinquent debt.
In addition to federal tax obligations, a majority of the states have partnered with the IRS as well for the offsetting of refunds. This means that the IRS may apply your refund to state tax debt (if you do not owe the IRS), and the state may send us your refund in turn.
Other federal and state debts are paid by your federal refund as well, including child or spousal support and past-due student loans.
Are you an Injured Spouse?
In order to be considered an injured spouse, in addition to being a non-liable party to your spouse’s debt, you must be able to claim a portion of the refund.
The IRS will not split the refund 50 / 50. As the injured spouse, if your portion of the refund is expected to be applied against the debt you are not liable for, use the form to claim the amount you are entitled to.
This means that you must be entitled to a refund on your own. If the refund on your joint return is made up of tax withholdings, tax credits, estimated tax payments, etc. that only your spouse made, then you are not entitled to any refund and you cannot make a claim for any portion of that refund via Form 8379.
If you would demonstrate a refund if you filed separately, because you worked and had federal income taxes withheld, or because there are certain credits or deductions to tax that only you are entitled to, then use Form 8379 to make your claim on this portion of the entire refund.
How to file Form 8379
The 8379 is sent in along with your joint tax return or your amended joint tax (Form 1040-X). File Form 8379 with the1040X only if you are amending your original return to now claim a joint refund.
According to the Form 8379 instructions, if you file Form 8379 with your joint return, attach it to your return in the order of the attachment sequence number (located in the upper right corner of the tax form). Enter “Injured Spouse” in the upper left corner of page 1 of the joint return.
It takes the IRS approximately 14 weeks to process a Form 8379 that is sent in along with a paper joint return. An e-filed return will take about 11 weeks for the 8379 to process. If the 8379 is sent in by itself, it carries an 8-week processing time.
For more information, see the instructions that accompany the Form 8379.