Final answer:
The available relief from joint tax liability under an innocent spouse claim is separation of liability. This relief separates the tax liability as if the spouses had filed separately, provided specific conditions are met. Additionally, tax credits like EITC may affect overall tax liability. O retroactive refund.
Step-by-step explanation:
When dealing with joint tax liability, one relief option available under an innocent spouse claim is separation of liability. This relief essentially separates the tax liability between the spouses as if they had filed separately. To qualify for innocent spouse relief, there are several conditions that must be met, such as proving that at the time you signed the joint return, you didn't know, and had no reason to know, that there was an understatement of tax. Moreover, it must be established that it would be unfair to hold you responsible for the understatement of tax.
Two other types of innocent spouse relief include refund allocation and retroactive refund, although these are distinctly different from separation of liability. Refund allocation involves designating how a refund is allocated, whereas retroactive refund suggests a refund for past tax payments. It's important to note that certain forms, like Form 1040, have eligibility restrictions, such as not being usable if the total is over $1,500.
Individuals may also benefit from other tax credits or assistance such as the Earned Income Tax Credit (EITC), Temporary Assistance for Needy Families (TANF), microcredit, or microsavings, which can influence the overall tax liability and impact the options for relief available to them.