Multiple states, kids, and married filing jointly

[user17525140957]

I have questions about being a MN resident when my spouse is living in another state (TN). The kids go back and forth between us. We are married filing jointly. TN doesn't have a state income tax and I'd like to claim the kids on my MN return (again, married filing jointly). If they technically live with my husband more than half the year, does that not count as "living with you for more than half the year"? Or since we are married filing jointly, do they mean living with either parent? Do they really have to be in MN for over half the year? Thanks!

[JotikaT2]

Since you are filing a joint return for Minnesota, you would be able to claim your kids on your state return.  Please see this link for more details on the Minnesota dependent exemption.

[NCperson]

@user17525140957 the broader question is whether you are completing form M1NR for your spouse's TN income....  you are filing JOINT in MN, but that doesn't mean that your spouse's TN income is taxable in MN.

[user17525140957]

Thank you for the replies. My husband has very little TN income as he's taking time off work to build our house. I was assuming that the little income he did bring in will be accounted for on the M1NR, but I'm not really sure. Do I not report it since it's not taxable to MN? I'm confused. I thought I read that they decrease the credit proportionally for the amount of income that is assignable to MN, so I assume I report his income but somewhere get to say what state the income was earned. Maybe not.

[user17525140957]

From the instructions on the M1NR:

Line 1, Column B — Wages, Salaries, Tips, etc.
Include wages, salaries, tips, commissions, bonuses, and any other employee compensation received for work performed:
• While a Minnesota resident
• In Minnesota while a nonresident

So it looks like I don't report his TN income on the M1NR...

[NCperson]

that is EXACTLY the point... when filing JOINT, your MN return BEGINS with the federal Adjust Gross Income (AGI) - look at Line 1 of MN form M1.   That means the TN income is INCLUDED in the first line of the MN tax return.  The purpose of M1NR is to exlcude the non-MN income from the tax return,  as it is not taxable in MN.

You pay state income tax a) based on where you work and b) based on your residency.  Since your spouse works in TN and his residency is TN, it would only be taxed in TN (if they had income tax) and not taxed in MN. 

[user17525140957]

Oh I see, that's the whole point of the M1NR. Of course. Thank you for clarifying!