I am looking for the answer or at least where to look in either the IRS code, US Code, and more specifically, California code, regarding the disposition of the tax refund. We physically separated at the end of August, but we were still legally married on the last day of the year. From what I have found, and I am pretty sure CA is a 50/50 state, that I am entitled to half. I am looking to verify that thinking or to find out the facts regarding the refund due to arguments from the other party.
There is a lot of information missing, so a specific answer can’t be provided to your situation. In general, California is a “50/50” state, meaning that all assets and debts acquired during marriage are presumptively split equally, regardless of who acquired or incurred it. That includes a party’s income/earnings during marriage. All assets and debts acquired prior to marriage or after separation are the earner’s/incurrer’s separate property asset or obligation. Thus, the date of separation (which is not necessarily the date of physical separation) determines how the tax refund or debt is allocated.
For example, let’s say the date of separation was August 31, 2017, and the spouses’ 2017 jointly filed tax returned generated a $9,000 Federal refund and a $3,000 State refund. While the refunds could be split equally, that’s not exactly how the law would treat them. The law would look at the amount of the refunds generated between January 1, 2017 and August 31, 2017 and equally split that portion. As of September 1, 2017, however, each spouse would be entitled to receive a refund based on who generated what amount of the refund. A simplistic (and not entirely accurate) approach would be to apportion the refunds as 2/3 community and 1/3 separate property, as Jan - Aug is 2/3 of the calendar year. The legally correct approach would require analyzing both parties’ respective tax contributions throughout the year.