Form 8958: Allocation of Tax Amounts Between Certain Individuals in Community Property States

Form 8958, officially titled "Allocation of Tax Amounts Between Certain Individuals in Community Property States," is an Internal Revenue Service (IRS) form used by married couples or registered domestic partners (RDPs) residing in community property states who choose to file separate federal income tax returns.

Common Community Property States:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin (with modifications)
  • Alaska (limited community property)

Why Use Form 8958?

Community property laws dictate that most income earned and assets acquired during a marriage belong equally to both spouses, regardless of who earned them. This can create a discrepancy when spouses file separately because their W-2s and other income statements might only reflect the income earner's name. Form 8958 helps reconcile this by allowing spouses to allocate their community income, deductions, credits, and other tax items fairly between their separate returns.

What Information Goes on Form 8958?

Spouses' Information: Names, Social Security numbers, filing statuses.

Income: Wages, salaries, interest, dividends, capital gains, etc. Identify each source and report the total amount received. Then, allocate each spouse's share.

Deductions: Itemized deductions or standard deduction amount, again specifying community or separate and allocating accordingly.

Credits: Earned income credit, child tax credit, etc., following the same community/separate allocation process.

Other Tax Items: Estimated tax payments, overpayments, etc., following allocation guidelines.

Do both spouses need to file Form 8958?

Yes, both spouses filing separate returns must attach a completed copy of Form 8958 to their respective tax returns.

Where can I find Form 8958?

You can download the Form 8958 and its instructions attached below.

What happens if I don't file Form 8958?

The IRS may presume an equal split of community income, which might not be accurate for your situation. This could lead to errors in your tax calculations and potential tax issues.