Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Joint Filing Credit
Posted by: fletcher, January 30, 2007 12:27AM
Greetings,

I have a federal and a state specific question for Ohio.

My wife won a $500 award in 2006. She is a "stay at home" mom and this is her only income in 2006. Should this be reported on line 21 of 1040 as "prizes and awards"?

In Ohio if both spouses have income (greater than or equal to $500) they qualify for the joint filing credit. Would her $500 count as income toward that joint filing credit if I have a salary around 65K? or is it excluded since it's an award?

Thanks.


Re: Joint Filing Credit
Posted by: Herb, January 30, 2007 12:48AM
fletcher Wrote:
-------------------------------------------------------

> I have a federal and a state specific question for
> Ohio.
>
> My wife won a $500 award in 2006. She is a "stay
> at home" mom and this is her only income in 2006.
> Should this be reported on line 21 of 1040 as
> "prizes and awards"?

Yes, include it on Line 21 with a notation.

>
> In Ohio if both spouses have income (greater than
> or equal to $500) they qualify for the joint
> filing credit. Would her $500 count as income
> toward that joint filing credit if I have a salary
> around 65K? or is it excluded since it's an
> award?

Your turn in the barrel, Art. I have no idea what a "joint filing credit" is.



Re: Joint Filing Credit
Posted by: wpatch, January 30, 2007 02:33AM
Yes, it qualifies for the joint filing credit in Ohio.

Re: Joint Filing Credit
Posted by: Art, January 30, 2007 05:10AM
Correct.

Just about all sources of income except interest and dividends count towards joint filing credit. Each spouse needs at least $500 of income to use joint filing credit.


Better: if filing MFS gives you a much lower federal plus ohio tax total, then forget about the small joint filing credit and file MFS. That works well when incomes are not more than 2:1 apart and no big federal tax benefits will be lost.

For non-Ohians: Ohio's tax structure is a steeply increasing tax rate and a single tax table regardless of filing status, and some tax credits have a per return maximum. To partially mollify taxpayers, they offer a joint filing credit to lower Ohio tax. At levels of income above the federal 15% bracket, this credit is 5% of Ohio tax. Pretty small.

Re: Joint Filing Credit
Posted by: fletcher, January 30, 2007 01:57PM
Thanks for all replies. The odd thing is that the extra $500 actually nets you more money by throwing in the joint filing credit then if the award was not reported. Go figure.

Unfortunately in my situation MFS would not really help since the income is 99% on one person.



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