I got married and found out my spouse owes back child support, student loans and owes the IRS – what do I do now?
If these debts are incurred before marriage and you file a joint tax return, most likely the tax refund will be applied to the spouse’s debt. Although, there is another option than just marking “Married Filing Separate” on your MFS is the typically the worst filing option (especially if children are involved) because this fling status disallows you from claiming the Earned Income Tax Credit. You may still file jointly and fill out a Form 8379, Injured Spouse Allocation. This form allows you to qualify for all the credits as if you filed jointly, but it separates your income, federal withholdings and credits to you may still receive your portion of the tax refund. The spouse with the debt will still have their refund applied to the past debt.
Keep in mind when filing the Injured Spouse Allocation form, it will delay the refund processing by several months as the IRS has to sort through income, deductions and credits and split those between you and your spouse.
If you already filed and didn’t know about the debt until they already applied the refund, then you may file that Injured Spouse Allocation form separate after the return has been processed and requested for the separation of income, deductions and credits.
If you have additional questions or need help filing out this form, please reach out to your local tax professionals at Meadville Tax Service for your free consultation at 814-333-2488 or firstname.lastname@example.org.