STATE TAXATION – EARNED INCOME TAX CREDIT – GROSS INCOME TAX – FILING STATUS
Tax Court: Doreen A. Scott v. Dir., Div. of Tax’n; Docket No. 010435-2022, opinion by Cimino, J.T.C., decided December 22, 2023. For plaintiff – Doreen A. Scott, pro se.; for defendant – Michelline Capistrano Foster, Deputy Attorney General (Matthew J. Platkin, Attorney General of New Jersey, attorney).
Held: In this challenge to the Director’s denial of the Earned Income Tax Credit (EITC), Ms. Scott filed her tax returns as head of household. Her husband, Robert Scott, filed as single. Since the Scotts are married and living together, Ms. Scott cannot file as head of household and Mr. Scott cannot file as single. Instead, their tax status is married, either joint or separate. The Director selected married-separate which maximizes the State’s recovery. The Scotts want married-joint which reduces, but does not eliminate, the EITC.
The Director argues that taxpayers must file a married-joint federal return to qualify for the credit. The court rejects this contention. Further, barring any specific statutory prohibition, married taxpayers are entitled to select whether they want a tax status of joint or separate. An incorrect selection of tax status, such as head of household or single, does not preclude a married-joint return, nor allows the Director to impose married-separate status. The Scotts are entitled to the EITC, albeit somewhat reduced.
(25 pages)