HAR § 18-235-93 — Joint returns

(a) In general. A husband and wife, as defined in section 235-1, HRS, may file a single joint return. A joint return may be filed even though one of the spouses has neither gross income nor deductions, and even though the spouses are not living together at any time during the taxable year, except as provided below: (1) No joint return shall be filed if the spouses are legally separated under a decree of divorce or of separate maintenance; (2) No joint return shall be filed if either spouse is a nonresident alien at any time during the taxable year; provided that section 6013(g), IRC, (joint returns of income tax by husband and wife) relating to the election to treat a nonresident alien individual as a resident of the United States is incorporated by reference and the election under the IRC shall be accepted as an election for the purposes of chapter 235, HRS; (3) No joint return shall be filed if the husband and wife have different taxable years, except that if the spouses’ taxable years begin on the same day and end on different days because of the death of either or both, then a joint return may be filed with respect to their taxable HRS §235-93 §18-235-93 year. This exception shall not apply if the surviving spouse remarries before the close of the surviving spouse’s taxable year, or if the taxable year of either spouse is a fractional part of a year due to a change of accounting period; (4) In the case of the death of one or both spouses, the decedent’s joint return may be filed only by the executor or administrator of each decedent’s estate, except that in the case of the death of one spouse a joint return may be made by the surviving spouse with respect to both the surviving spouse and the decedent if no return for the taxable year has been made by the decedent, no executor or administrator has been appointed, and no executor or administrator is appointed before the last day for filing the return of the surviving spouse. If an executor or administrator of the decedent is appointed after the filing of a joint return by the surviving spouse, the executor or administrator may disaffirm the joint return filing by filing a separate return for the decedent’s taxable year within one year after the last day for filing a return of a surviving spouse. The return filed by the surviving spouse shall constitute the surviving spouse’s separate return; (5) No joint return shall be filed if either spouse is a nonresident (i.e., resident of another state), unless the nonresident spouse agrees to subject all sources of income to Hawaii income tax. (b) Effect of filing a joint return. For any taxable year in which husband and wife have filed a joint return, separate returns may not be made by either of the spouses after the date for filing the return of either spouse has passed. However, an executor or administrator may disaffirm a joint return as set out in subsection (a)(4). If a joint return has been filed, the liability of the spouses is joint and several; therefore, any refund checks issued based on the filing of a joint return shall be in the names of both spouses, even if the spouses separate or divorce before the refund is issued. Divorced spouses continue to be jointly and severally liable for those taxable years for which they filed a joint return. All or part of an overpayment from a joint return may be retained by the department to offset any delinquent tax liability of the taxpayers. Where the delinquent tax liability is a separate tax liability of one of the taxpayers, only that taxpayer’s proportionate share of the overpayment shall be retained. A married taxpayer’s proportionate share of the overpayment shall be based on the taxpayer’s respective tax liability, calculated as if each married taxpayer had filed their respective tax returns separately. In order to determine a married taxpayer’s proportionate share of the tax liability, the amount of the joint tax liability shall be multiplied by the ratio of the taxpayer’s tax liability (calculated as if the taxpayer had filed separately) as it bears to the total tax liability of the taxpayers (calculated as if both taxpayers filed separately). From the information available on the joint return, the department shall allocate the income, deduction, and credit items to the appropriate individual taxpayer, in order that they may calculate their separate tax liabilities. Income, deduction, and credit items which the department cannot trace to either taxpayer, from the information filed by the taxpayers, shall be allocated equally between the taxpayers. Taxpayers may dispute the department’s allocation of any income, deduction, or credit item upon presentation of sufficient evidence to the director of taxation. The director of taxation shall make the appropriate adjustment to the allocation and refund. Example: A and B are married and earn income of $20,000 and $30,000, respectively. For 1990, A and B agree to file a joint tax return. Notwithstanding their joint tax liability of $3,825 for 1990 (using the tax tables set forth in section 235-51, HRS), B owes a separate delinquent general excise tax liability from a prior year of $750. Withholding in 1990 from A ’s wages totaled $1,500; withholding in 1990 from B’s wages totaled $2,500. Deductions of $2,000 are not directly traceable to either spouse; an additional $500 in deductions are traceable to A. The amount of tax liability owed by A and B shall be determined based on their proportionate tax liability, calculated as if they had filed separately. In this case, A ’s tax liability, calculated as if A had filed separately, is $1,445; B’s tax liability, calculated as if B had filed separately, is $2,387.50. A and B’s proportionate share of the joint tax liability is calculated as follows: A/B tax liability, calculated as if filing separately ———————————— x joint tax liability A ’s separate tax liability + B’s separate tax liability A and B’s share of the tax liability is equal to the amount withheld from A/B minus A/B’s proportionate share of the joint tax liability. Therefore: