What’s the Difference Between an Innocent Spouse and an Injured Spouse?

An innocent spouse defense is used to get relief from the typical joint and several liability that exists for joint tax returns. If you filed a joint return, and your spouse erroneously understated the amount of tax owed, you can attempt to claim innocent spouse relief. If you are successful, the IRS will not attempt to collect the understated tax from you.

An injured spouse is a spouse whose portion of a joint tax refund has been offset due to the other spouse’s financial obligations. An injured spouse can use form 8379 to attempt to reclaim their portion of a refund, but only if they are not responsible for the spouse’s financial obligation that caused the offset, and if the injured spouse either paid federal tax during the year or is due a refundable tax credit.

Why Tax Refunds Are Offset

The IRS can offset, or seize, your tax refund to satisfy a number of past due financial obligations. Some debts that can be offset include:

• federal tax debt
• state tax debt
• state unemployment compensation
• spousal support
• child support
• federal non-tax debt, such as student loans

If your spouse has any of these debts, the IRS will likely offset your tax refund. You can only file for an injured spouse allocation if you are not jointly responsible for these obligations. If you are jointly responsible for federal tax debt, you may be able to escape this joint liability by applying for innocent spouse relief.

Eligibility for Injured Spouse Allocation

You must provide information showing what portion of the tax refund you are owed. This will be calculated based on the amount of tax you paid throughout the year—either as part of your tax withholding or estimated tax payments—and any refundable tax credits you are owed, such as the Earned Income Credit.

If you live in a community property state, such as California, special rules apply to the calculation of your injured spouse refund. You may not actually receive the amount of tax you paid or refundable credits you are owed.

In some cases, you may not be able to receive any refund as an injured spouse allocation because your income is presumed to be community property, which can be used to satisfy your spouse’s debt, even if the debt was incurred before or after your marriage. The exact injured spouse allocation will depend on your state’s laws and the facts of your situation.