State tax question? AOS pending.

[Stuart and Katie 13]

My husband came here on a K-1 visa in August 2013. We filed for AOS in October 2013 but he has not yet received his green card.

We successfully filed our Federal taxes but are having trouble with our Maryland state taxes. I am wondering if anyone here has been in a similar situation in Maryland, or your experience in another state may be helpful.

The MD state income tax return form works off your Federal adjusted gross income. It instructs us to subtract any income made outside MD. If the filer only lived in MD for part of the year (as is the case with my husband), we must change his exemption and the standard deduction, proportionally according to the amount of time he lived outside of MD.

The basic problem is that since we took the Foreign income deduction, his income outside of MD is already not included in our Federal adjusted gross income.

Therefore..

-If we follow instructions, we would be subtracting his non-MD income again, which would make our taxable state income much smaller and I'm sure is not ethical/legal.

-If we don't subtract his non-MD income, I am unsure whether I still need to change his exemption and the standard deduction.

-If I do need to change the standard deduction, I am unsure how to do this as there is one standard deduction for both of us (and I lived in MD the whole year)

-Since he made no MD income at all, I am allowed to file married-filing single (despite filing jointly on our Federal return). However, this would cause the amount of our refund to plummet; in fact, it is possible I would even end up owing tax. While I am more than willing to do this if it is the only legal option, I feel that if I am married and my husband lives here, I should be able to file married-jointly.

I have e-mailed and spoken on the phone with two state employees who are supposedly tax "professionals" and they were completely useless. I have also poked around online for any information but haven't had much luck.

Sorry this got so tl;dr, but i appreciate any advice you may have.

Thanks!

[JRF 117]

I'm not a California resident so take this advice with that in mind - my sense is that if you only exclude income on the MD return to the extent it is part of your AGI on the federal return. I assume your husband has an SSN (I am a CR-1 filer and know next to nothing about the K-1 process).

Have you considered using Turbotax to file your Maryland taxes? I've used Turbotax for a number of fairly complicated returns over the years (including filing taxes in two states in one year while being a resident of a state with no income tax (Texas). I used it last year to create (print) the return I filed by paper because I was filing for my wife (foreign alien, still waiting on that visa) and had no issues.

Good luck!