state taxes if married out of state gal?

Question

I got married in november of 2006. I completed my fed return no problem. The problem is with the Arizona Tax return which is where we live. My wife made no money in Arizona, but i included her wages in the federal form. The state form asks for the "Federal adjusted gross income". But i dont know how to subtract the money my wife made in colorado. Any ideas?

Answer 1

See Arizone Income Tax Ruling (ITR) 95-2:
http://www.revenue.state.az.us/ResearchStats/rulings/itr95-2.htm

You must use form 140PY. This form is used on joint returns where one filer is a full year resident and the spouse is a part year resident.

Answer 2

If she lives in AZ, she must pay AZ tax.

If she lived in CO, you may have to file a separate AZ return to exclude her CO income from AZ tax. Some states work it that way, I know that VA used to. Alternatively you may be able to file a joint AZ non-resident return to exclude her CO income if she does not live in AZ.