What does community income refer to?

Community income refers to the earnings of a married couple that are considered jointly owned by both spouses, regardless of which one of them actually earned the income. This concept is particularly relevant in community property states, where most income earned during the marriage is treated as shared equally between the spouses.

In this context, income that is deemed shared equally signifies that both partners have an interest in it, leading to the tax benefits and obligations being split between them. This approach affects various aspects of income tax filing, including how both parties report income, deductions, and credits.

The other options listed do not accurately describe the nature of community income: the income solely attributed to one spouse does not reflect the shared ownership aspect; income that can only be claimed by the earning spouse does not align with the principle of shared community income; and income exempt from state taxes is unrelated to the concept of community income itself.