If you filed taxes jointly with your spouse and expected a tax refund, only to have it used to pay for your partner’s debts, you might be what’s known as an injured spouse. An injured spouse is someone who’s handled their own tax debts but is married to someone who might not have done the same. You might find this out through a tax audit, or you might receive a letter from the IRS declaring the reason for withholding your refund. However you discover your partner’s debts, there are things you should know about being an injured spouse.
You Are Not Liable
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If your spouse acquired debt before you were married or has debt that is solely his or her responsibility — such as income tax or child support — you are not liable for it. You might be eligible to file an injured spouse claim, allowing you to reclaim your portion of your tax refund. However, you must meet specific qualifications to be eligible for this claim:
- You must have reported income on your joint return. If you didn’t report any income, then your share of the refund would be $0. Therefore, you wouldn’t be eligible to claim any portion of the refund used for your partner’s debt.
- You must have made and reported payments on the return. Things such as estimated tax payments, federal income tax withheld from your wages, and refundable tax credits all count as eligible payments to report.
You Must File a Claim
The IRS won’t know you’re not responsible for your partner’s debt unless you file an injured spouse allocation form. Without submitting this form either with your tax return or separately, the IRS might continue to hold you jointly liable for your spouse’s debt.
Even if you’ve filed the form, know that it can take up to four months for the claim to be investigated and processed and for you to see any part of your tax refund. Make sure to plan accordingly.
It’s Not the Same as “Innocent Spouse”
While similar, filing an injured spouse claim is not the same as filing an innocent spouse claim. As an injured spouse, you’re trying to absolve yourself of responsibility from debt your partner either accumulated before you were married or is solely responsible for. Things like defaulted student loans, underreported income tax, or child support payments fall into this category, as well as unpaid state and local taxes.
The term “innocent spouse” is most often used for couples who are no longer together and refers to someone who learns of a tax liability they hold no responsibility for. For example, if you separate from your spouse and later receive a letter saying you neglected to file a portion of income, but you know you filed your income properly, your partner might have withheld information you can’t be responsible for. Then you would file for innocent spouse relief.
These are just a few of the requirements you must meet to qualify as an injured spouse. If you’re struggling with whether you can claim this status, it’s best to seek help from a tax professional.