An injured spouse allocation form is a form the IRS uses to calculate your tax credits based on your individual income. This is done if your joint income tax refund is subject to garnishment and only your spouse is legally responsible for the debt. The purpose of this form is to allow you to receive a percentage of your state and federal income tax refund. You file an injured spouse allocation form with the IRS or your state’s treasury department.
The IRS makes a determination to see what portion of the child tax credit should be attributed to your income and what percentage should be attributed to your spouse's income, ensuring that only a portion of the told credit will be garnished.
Important Filing Requirements
Your original tax filing status must be married filing jointly in the tax year for which you are filing the injured spouse allocation. Also, if both you and your spouse are legally responsible for the debt, for example, the garnishment is from a credit card for which you are co-borrowers or joint account holders, you do not qualify for an injured spouse allocation. You can file for an injured spouse allocation only if you earned income during the tax year for which you are filing the allocation and you are not legally responsible for the debt.
Recalculating Your Taxes
To determine how much of the child tax credit you are entitled to receive, the IRS will recalculate your federal tax return using the married filing separately tax status. This means the IRS will recalculate your taxes and credits, including the child tax credit, based on your individual incomes. Be aware that the IRS recalculates your taxes this way only for the injured spouse allocation and does not require you to re-file your taxes under a different tax filing status to receive your percentage of the child tax credit.
Child Tax Credit Limits
After separating out your income, the IRS will determine the amount of the child tax credit based on your income alone. The income limit for the child tax credit is subject to change each tax year. The current income limit for the 2017 tax year is $55,000 for the married filing separately tax filing status. This means that if your individual income exceeds this amount, you will not qualify for the child tax credit. For example, if you and your spouse have a combined adjusted gross income of $100,000, your individual income was $60,000 and your spouse’s was $40,000, you would not qualify for the child tax credit.
As of 2018, the limit will be much higher: $200,000 for married couples filing singly. So if you and your spouse have a combined income of $100,000, your individual income was $55,000 and your spouse's was $45,000, you would qualify for the credit starting in 2018.
Child Tax Credit Allocation
If your income qualifies you for the child tax credit, then the IRS will separate your income and allowable deductions from your spouses. It will then determine the percentage of the child tax credit it can attribute to your income and what percentage of the credit it can attribute your spouse’s income. After doing so, the IRS will send you a refund check or direct deposit for your percentage of the child tax credit. It will apply your spouse’s percentage of the tax credit to his garnishment or tax refund offset.
- IRS: Injured Spouse
- IRS: Publication 972 Child Tax Credit
- Tax Tiger: Injured Spouse Relief
- TurboTax: 7 Requirements for the Child Tax Credit
- Forbes: What The Expanded Child Tax Credit Looks Like After Tax Reform
- Internal Revenue Service. "Instructions for Form 8379 (11/2019)." Accessed Jan. 28, 2020.
- Internal Revenue Service. "Topic No. 203 Reduced Refund." Accessed Jan. 28, 2020.
- Internal Revenue Service. "Prior Year Products." Accessed Jan. 28, 2020.
- Internal Revenue Service. "Form 8379." Accessed Jan. 28, 2020.
- Internal Revenue Service. "Publication 971 (10/2014), Innocent Spouse Relief." Accessed Jan. 28, 2020.
- Internal Revenue Service. "Innocent Spouse Relief." Accessed Jan. 28, 2020.
Sue-Lynn Carty has over five years experience as both a freelance writer and editor, and her work has appeared on the websites Work.com and LoveToKnow. Carty holds a Bachelor of Arts degree in business administration, with an emphasis on financial management, from Davenport University.