Posted by LLOYD J CAZES CPA

Injured Spouse Allocation: Everything You Need To Know

Injured Spouse Allocation: Everything You Need To Know

For an “injured” spouse to regain the share of a joint return, they must file Form 8379. This is the case when a past-due obligation of the other spouse was applied by a joint overpayment. An injured spouse can seek a refund of overpaid state taxes, federal taxes, child support, and alimony or non-tax debt such as student loans using Form 8379. As soon as the injured spouse recognizes that a refund will be applied to a spouse’s previous obligation, Form 8379 should be filed right away though typically, spouses are jointly responsible for a tax obligation. 

Take note the following:

  • The “injured” spouse can file IRS Form 8379 if married spouses file a joint tax return and any overpayment is applied to one party’s past tax obligation. Through this, the injured spouse can receive at least a portion of the refund. 
  • The injured spouse’s portion of the refund can be released only if they will request the IRS to do so by filing IRS Form 8379.
  • With amended joint tax (Form 1040X) or joint tax return, Form 8379 can be filed. You can also file it alone without the company of other forms. 

How does Form 8379 works?

If you found out that against your spouse’s legally enforceable past-due obligation, all or part of a share of an overpayment is or will be expected to be applied (offset), you should download and file Form 8379. For each year this condition is in effect, Form 8379 must be filed, and for each year the taxpayer wants their portion of any offset refunded. 

The IRS can take the entire refund due even though only one spouse owes the debt if a spouse has fallen behind on alimony payments and the spouse file a joint tax return.  The negatively impacted spouse is where the term “injured” refers to. A request for the IRS to release the injured spouse’s portion of the refund is the purpose of Form 8379: Injured Spouse Allocation. 

The injured spouse can file the form with the joint tax return or file separately if a couple files their return knowing any refund might be seized. 

Injured vs. Innocent spouses

Not to confuse between an “injured” and “innocent” spouse is very important in the Form 8379: Injured Spouse Allocation rules. When your spouse filed a fraudulent tax return without your knowledge and it will lead you to face the consequences such as criminal charges, back taxes, or civil penalties, then you are deemed as “innocent”. In this case, a Form 8857 should be filed by the innocent spouse, not Form 8379. 

How can you file Form 8379?

When the joint overpayment was (or is expected to be) applied (offset) to a past-due obligation of the other spouse, then the injured spouse should file Form 8370 or a jointly filed tax return. The injured spouse may regain their share of the joint refund by filing Form 8379. With an amended joint tax return (Form 1040X) or joint tax return, Form 8379 can be filed. Only also if to claim a joint refund, a spouse is amending an original return. 

Alternatively, if the couple finds out after filing the return that a refund was seized, the injured spouse can file it separately from the return. There are four parts in the form:

  • Part one: To determine if someone really is an injured spouse, a series of yes-or-no questions will be asked, and if so how to proceed
  • Part two: This is where you should provide the information about the joint return in question that produced the refund.
  • Part three: This is the part where the amount to be released by the IRS will be determined. This part also is where you can determine exactly how much of the refund is attributable to you as the injured spouse. 
  • Part four: The injured spouse signs and dates this section. This part will be used and filled out only if the form is being filed separately from a tax return.

If you are still confused about what to do in a situation like this, you can always consult a tax professional to help you and guide you on what form to sign and what step to do first.

LLOYD J CAZES CPA
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