Form 8958: Community Property Allocation

Form 8958 is titled Allocation of Tax Amounts Between Certain Individuals in Community Property States. It is for spouses or registered domestic partners who live under community property laws and file separate federal returns. You attach it to Form 1040, 1040-SR, or 1040-NR. IRS: Form 8958 (Rev. November 2023)

Who uses it

The form is intended for people who meet two conditions. First, they are subject to community property laws. Second, they file separate federal income tax returns. If you file a joint return, you do not use this form. Read Married filing jointly or separately to compare the two options.

Community income and separate income

The state where you are domiciled generally decides whether an item is community income or separate income. The IRS instructions say you report half of all community income and all of your separate income on your own separate return. Some items follow special rules. For example, partnership income that comes from one spouse's work is treated as community property.

How the columns work

Column A shows the total amount for the household. Column B and column C show the amount allocated to each spouse, with each spouse's SSN. The form lists items such as:

wages, by each employer
interest and dividends, by each payer
the state income tax you received back
self-employment income, and the deductible part of self-employment tax
capital gains and losses
pension income, and rents, royalties, partnerships, estates, and trusts
taxes withheld, and other items on page 2

Use a separate statement if you need more room, and put your name and SSN on it. IRS: Form 8958, Lines 1 to 12

Deductions

If you file separately, your deductions generally depend on whether the expense relates to community income or separate income. Business and investment expenses follow the income they produce. Keep records that show which income each expense came from.

Where to read more

IRS Publication 555, Community Property, is the main guide. It covers how each state treats income, property, and debt. The form's instructions point to it for more detail. Your state's own law still controls the answer.

If you filed separately in a community property state, read State vs. federal return to check how your state return connects with the federal forms.

Why the state matters

The state where you are domiciled generally decides the character of your income. The same paycheck can be community income in one state and separate income in another. Because of that, the answer can change if you move. Check the rules for your state before you split any item.

Pensions and separate property

Pension distributions are generally treated as community or separate income based on the periods you took part in the plan while married and living in a community property state. Some states treat income from separate property as community income, and others do not. The form's instructions say the answer depends on state law.

Exempt income

Community income that is exempt from federal tax generally stays exempt for both spouses. For example, some income earned outside the United States can be exempt. If you earned income and met the conditions, that income can also be exempt for your spouse, even if your spouse did not meet the same conditions.

Check that the columns add up

For each line, the amounts in column B and column C should add up to the amount in column A. Put an item in one spouse's column only when the income or deduction clearly belongs to that spouse under the state rules. If you are unsure, read Publication 555 before you enter the amounts.

General information, not advice about your situation.

Sources: Sources: IRS, Form 8958 (Rev. November 2023), Allocation of Tax Amounts Between Certain Individuals in Community Property States (https://www.irs.gov/pub/irs-pdf/f8958.pdf); IRS, Publication 555, Community Property (form instructions reference) This is general information, not advice about your specific return.

← Back to the blog · Leer en español