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Injured Spouse Relief

Married taxpayers file a joint tax return because of benefits this filing status allows them, but these benefits come at a cost, a significant cost.  When filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise from the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses on a married filing joint return are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can secure relief from being jointly and severally liable.

Similarly, a taxpayer’s refund may be seized in order to pay a spouse’s liability for past federal, or state taxes or other liabilities, when a joint federal return is filed.  A taxpayer can claim relief in this circumstance as an Injured Spouse.

You’re an Injured Spouse if you file a joint tax return and all or part of your share of a refund from a joint return was or will be applied against the separate past-due federal tax, state tax, child or spousal support, or federal non-tax debt (such as a student loan) owed by your spouse.  You must have paid federal income tax or claimed a refundable tax credit, such as the Earned Income Credit or Additional Child Tax Credit on the joint return, and not be legally obligated to pay the past-due debt.

An injured spouse claim is for allocation of a refund of a joint refund while an innocent spouse claim is for relief or allocation on a joint and several liability of a joint return.  If you’re an injured spouse, you may be entitled to recoup your share of the refund.