Definition: This applies only to state tax returns. In community property states, married persons are considered to own their property, assets, and income jointly. If married people decide to file separate tax returns, they must follow their state rules for community income. Generally, both spouses must combine their total income, and divide that income in half. Each spouse then reports half of the joint income on his or her tax return. The community property states are:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
For federal income tax purposes, married people may file a separate return to report only his or her own income.
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