This question comes up now and then: My spouse is disabled and has no income; can we file as married filing separately and I claim him/her as a dependent on my tax return?
The answer to this question is yes. See IRS Publication 501, page 11.
Let’s look at some of the mechanics. If a married couple files separate tax returns, one spouse can claim the other as a dependent if the spouse being claimed as a dependent:
- Has no gross income, and
- Isn’t filing a tax return, and
- Isn’t a dependent of any other taxpayer
From IRS Publication 501. Link here: https://www.irs.gov/pub/irs-pdf/p501.pdf
But again, the real question is, why would anyone want to file this way instead of just filing jointly?
Possible Reasons to File Separately
Off the top of my head, I can think of two scenarios where a couple in this situation might want to file separately:
- In situations where the disabled spouse has a benefit that is based on household income, I suppose. By being shown as a dependent rather than a primary taxpayer, I suppose, perhaps, that it would make sense to file this way. I don’t know enough about how things such as disability benefits are calculated to know whether this is the case or not. Thus the reason for my purposeful use fo vague, non-committal language.
- Student loans, with income-based repayment, could be another situation where filing separately might be useful. If the disabled spouse has student loans on IBR and a joint return is filed, I believe the required payment would be calculated based on the income of both spouses.
In both of those scenarios, you’d really need to contact the benefits administrator (SSA, the student loan lender, etc.) to find out how the benefit or repayment amount is calculated.
I’m interested to hear thoughts from readers on this, as to why a couple in this circumstance would want to file separately. It seems like it comes up multiple times a year, and at first the cynic in me thought it was just people over-thinking things. But if it would help with benefit calculations or student loan repayment, I could see the merits of filing this way.
it could also be to protect the disabled spouse from tax [or other] debts of the taxpayer. if the disabled spouse is a signer on the return, the spouse is liable for the debt. true story: taxpayer had major income. spouse disabled. taxpayer owed mega bucks to IRS. since spouse was not a signatory on the return, spouse was not required to pay the taxes when taxpayer died. so they used it as estate planning. i so rarely see MFS that when i am asked i go through a long check lists of ‘why’. most common reasons are student loans, bankruptcy, and tax debt. and this may not have to do with federal issues. it may state related, with a requirement that the state status be the same as the federal.
Robyn, thanks for the comment. I also rarely see MFS. Almost always it’s either student loans or tax debt, or else an isolated 1-year thing where filing separately happens to work out best.