Income allocation information is required when electronically filing a return with a Married Filing Separately or Registered Domestic Partner status in the Individual module of Intuit Lacerte. Refer to the information below to assist with questions regarding Screen 3.1 Community Property Income Allocation.
- Generating Form 8958
- Community Property and the MFJ/MFS Worksheet
- Suppress Form 8958 Allocation of Tax Amounts between Individuals in Community Property States
- Splitting a Married Filing Jointly Return
How to split the retirement distributions on a community property return between the taxpayer and spouse
Lacerte doesn't automatically split retirement distributions. Because of this, you'll need to manually enter adjustments in the taxpayer/spouse split returns, after the split is complete.
When Community Property options are set to:
- No - The program will allocate all items according to the "taxpayer" and "spouse" designators.
- Yes - The program will net all wages and business income or loss and allocate 50% to each spouse on the MFJ/MFS worksheet. The program allocates all other income and deductions (including pensions) according to the "taxpayer" and "spouse" designators.
Follow these steps to override the community property designation:
- Go to Screen 3, Miscellaneous Information/Direct Deposit.
- Scroll down to the Miscellaneous section.
- Locate the checkbox labeled Apply community property rules to unemployment compensation exclusion (UCE) and mark it, if applicable.
Unemployment Compensation Exclusion was not extended further, meaning it only applies to tax year 2020.
This will override the selection set in your Program Options on a client-by-client basis.
