Non-Obligated Spouse Information (Forms)

List of Topics

 

Purpose of the Income Allocation for Non-Obligated Spouse Form 743

The form is used when the Michigan Department of Treasury holds a joint income tax refund or homestead property tax credit payment for an amount owed by one spouse for the following:

  • Taxes
  • Other debts to the state (e.g., Driver Responsibility, Probation fees, etc.)
  • Child support owed to the Friend of the Court,
  • Internal Revenue Service levy, or
  • A garnishment or court order

The form is used to divide the refund amount between both spouses and designate how much of the joint refund can be applied to the debt(s). When both spouses have a debt, each spouse's share of the refund is applied to his/her debt.

In the event that you have multiple debts you may receive a second Income Allocation form to be completed.

When there is more than one debt the refund is applied in the following order:

  1. Taxes owed to Michigan
  2. Other debts owed to Michigan
  3. Debts owed to a third party, which the state is obligated to pay including child support, garnishments, levies and Bureau of Workers' & Unemployment Compensation. These debts are paid in the order in which the request for payment was submitted to the state.
  4. Residual Refund

Note: Michigan Department of Treasury Customer Service Representatives are unable to assist with the completion of the Income Allocation for Non-Obligated Spouse Form 743.

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What & When to File

If your overpayment is held for a debt, you will receive a personalized Income Allocation for Non-Obligated Spouse Form 743. You must complete and return the form within 30 days from the date on the accompanying letter to the Michigan Department of Treasury. Failure to file the form within the 30 day time period will result in the entire refund, if needed, being applied to the debt.

If you wish to have the entire refund applied to the debt, do not complete the form. Instead, check the box “Apply refund to the debt(s)” provided above the signature area on page 2 of the form. Each spouse must sign and date the form.

If the form does not have both signatures or a signed statement attached, the full refund, if needed, will be applied to the debt.

The Michigan Department of Treasury does not accept Injured Spouse Allocation Form 8379. It is an Internal Revenue Service form. The Michigan Income Allocation for Non-Obligated Spouse Form 743 is the only form accepted by the Michigan Department of Treasury when allocating income between spouses.

The personalized form is the only form that will be accepted.
Under no circumstances will another form be accepted.
Once the form is submitted, no changes will be accepted.

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How to Allocate Income

Do not adjust any figures printed on the form by the Michigan Department of Treasury. An amended Michigan return should be filed only if you made an error on your original return that was not corrected by the Michigan Department of Treasury.

Divide each spouse's share of income by the joint income to determine the income percentage ratio.

Allocate the amounts to the spouse who earned the income as though you had filed separate federal income tax returns.

Jointly earned income is generally allocated equally to each spouse.

Allocate income, adjustments to income, additions, subtractions and deductions to your adjusted gross income as reported on the Michigan return to the applicable spouse.

If one spouse had a zero or negative amount, that amount should be used to reduce the taxable income of the other spouse.

The city tax credit is prorated based on each person's city tax withheld. The credit must be prorated based on the ratio of each spouse's tax withheld to total tax withheld. (2011 and prior years' tax returns only)

A credit for contributions may be shared equally or allocated to the spouse making the contribution.

Qualified Adoption credit and Stillbirth credit amounts are divided equally between both spouses share of income. (2011 and prior years' tax returns only)

Earned Income Credit is prorated based on each spouse's income percentage ratio.

Note: An incomplete Income Allocation for Non-Obligated Spouse Form 743 may result in the entire income tax refund or credit payment being applied to the debt(s). If you have any questions or if any part of the instructions are unclear, please call the number on the letter you received with the form. The form will be considered incomplete if you do not fill out each line in each column.

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Claiming Exemptions

Each person is entitled to a personal exemption, including any special exemptions that you would be entitled to claim if separate Michigan returns were filed.

Exemption allowance for dependents must be prorated based on the ratio of each spouse's income to federal adjusted gross income.

You must prorate your dependents even if they belong to one spouse from a previous marriage.

If one spouse had a zero or negative adjusted gross income, or negative taxable income, the other spouse should claim the exemptions.

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Deceased

When the primary filer is deceased, the spouse automatically becomes the primary filer.

If the decedent owes the debt, the spouse will still receive a refund – providing the spouse is not liable and the Income Allocation for Non-Obligated Spouse Form 743 is completed.

Attach a copy of the death certificate when you return the Income Allocation for Non-Obligated Spouse Form 743.

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Homestead Property Tax or Farmland Credit

A homestead property tax or farmland credit is divided equally between both spouses if the property is owned jointly, regardless of whom earned the income.

If the property is owned or leased by one spouse, that spouse may claim the entire credit.

Proof must be furnished at the time the Income Allocation for Non-Obligated Spouse Form 743 is filed.

Copies of utility bills and/or mortgage escrow statements are not acceptable proof.

Acceptable proof would be:

  • A copy of the lease for the tax year you are claiming a credit
  • A notarized statement from a landowner
  • A copy of your property tax statements from your local assessor
  • A copy of the deed to the property. 
Note: An incomplete Income Allocation for Non-Obligated Spouse Form 743 may result in the entire income tax refund or credit payment being applied to the debt(s). If you have any questions or if any part of the instructions are unclear, please call the number on the letter you received with the form. The form will be considered incomplete if you do not fill out each line in each column.

If proof of sole ownership or leasehold is not received with the Income Allocation for Non-Obligated Spouse Form 743, the credit will be divided equally between both spouses.

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