multi-state military quick reference

MULTI-STATE MILITARY QUICK REFERENCE

Survey of State Military Tax Breaks & Filing Rules

FEBRUARY 15, 2021 © H&R BLOCK, INC.

Confidential & Proprietary Work Product

Multi-State Military Quick Reference

© H&R Block, Inc. 1 | P a g e

Table of Contents Servicemembers’ Civil Relief Act (SCRA) ....................................................................................................... 3

Military Spouses Residency Relief Act (MSRRA) ........................................................................................... 5

SCRA / MSRRA Tax Protections Chart ........................................................................................................... 6

Home of Record v. State of Legal Residence (DD2058) ................................................................................ 7

Community Property States/U.S. Possessions .............................................................................................. 8

States with the Most Military Personnel or Bases ........................................................................................ 9

States with the Largest Military Bases .......................................................................................................... 9

Federal Extension Rules ................................................................................................................................ 9

Alabama ...................................................................................................................................................... 10

Arkansas ...................................................................................................................................................... 11

Arizona ........................................................................................................................................................ 13

California ..................................................................................................................................................... 15

Colorado ...................................................................................................................................................... 18

Connecticut ................................................................................................................................................. 20

District of Columbia .................................................................................................................................... 23

Delaware ..................................................................................................................................................... 24

Georgia ........................................................................................................................................................ 25

Hawaii ......................................................................................................................................................... 27

Iowa ............................................................................................................................................................. 29

Idaho ........................................................................................................................................................... 31

Illinois .......................................................................................................................................................... 33

Indiana ........................................................................................................................................................ 35

Kansas ......................................................................................................................................................... 37

Kentucky ...................................................................................................................................................... 39

Louisiana ..................................................................................................................................................... 41

Maine .......................................................................................................................................................... 43

Massachusetts ............................................................................................................................................ 46

Michigan ...................................................................................................................................................... 50

Minnesota ................................................................................................................................................... 52

Missouri ...................................................................................................................................................... 55

Mississippi ................................................................................................................................................... 57

Montana ...................................................................................................................................................... 58



Nebraska ..................................................................................................................................................... 60

New Hampshire........................................................................................................................................... 62

New Jersey .................................................................................................................................................. 63

New Mexico ................................................................................................................................................ 65

New York ..................................................................................................................................................... 67

North Carolina ............................................................................................................................................. 70

North Dakota............................................................................................................................................... 72

Ohio ............................................................................................................................................................. 74

Oklahoma .................................................................................................................................................... 76

Oregon ........................................................................................................................................................ 78

Pennsylvania ............................................................................................................................................... 81

Rhode Island................................................................................................................................................ 83

South Carolina ............................................................................................................................................. 85

Tennessee ................................................................................................................................................... 87

Utah ............................................................................................................................................................. 88

Vermont ...................................................................................................................................................... 90

Virginia ........................................................................................................................................................ 92

West Virginia ............................................................................................................................................... 94

Wisconsin .................................................................................................................................................... 96

Appendix ..................................................................................................................................................... 99

Note that the following states have no individual state income tax and are intentionally excluded from this document:

• Alaska • Florida • Nevada • South Dakota • Texas • Washington • Wyoming



Servicemembers’ Civil Relief Act (SCRA)

On December 19, 2003, President Bush signed the Servicemembers Civil Relief Act (SCRA)1 to help ease the economic and legal burdens on military personnel called to active duty status in Operation Iraqi Freedom. The Act expands many of the previous law’s civil protections under the Soldiers & Sailors Civil Relief Act of 1940 and covers all active duty service members, reservists, and members of the National Guard while on active duty.

The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after the date of discharge from active duty. Jurisdiction of the Act reaches the United States, all states therein including political subdivisions, and all territory subject to the jurisdiction of the United States.

Provisions under § 4001 of the Act address income tax and residency issues for tax purposes. Considered together, the provisions of § 4001 outlined below are meant to preclude the possibility that service members will have their income taxed by both their home state and by the state where they are stationed.

50 U.S.C. § 4001(a) - RESIDENCE OR DOMICILE- A servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the servicemember by reason of being absent or present in any tax jurisdiction of the United States solely in compliance with military orders. 50 U.S.C. § 4001(b) - MILITARY SERVICE COMPENSATION- Compensation of a servicemember for military service shall not be deemed to be income for services performed or from sources within a tax jurisdiction of the United States if the servicemember is not a resident or domiciliary of the jurisdiction in which the servicemember is serving in compliance with military orders. 50 U.S.C. § 4001(e) - INCREASE OF TAX LIABILITY- A tax jurisdiction may not use the military compensation of a nonresident servicemember to increase the tax liability imposed on other income earned by the nonresident servicemember or spouse subject to tax by the jurisdiction.

Federal law states that the service member “neither loses nor acquires a residence or domicile” for tax purposes by reason of his military orders and station; the service member’s residency will remain the same as when he entered the military unless he takes proactive and intentional steps to change it.

Often, a change in domicile occurs when the service member files the necessary paperwork with the military, local, or municipal government office to establish a new state of legal residence. Absent these proactive steps, the service member remains domiciled in his state of residence when he entered military service and his active duty military pay does not become subject to tax in the active duty state. The service member will continue to file a resident state income tax return in his home state and his active duty military income is subject to tax on the home state tax return as dictated by that state’s laws.

1 50 U.S.C. § 4001, Pub. L. No. 108–189 (2003)



If a servicemember is in another state due to military assignment or orders, he generally does not have to file a nonresident return in that state unless he earns income in the nonresident state from non-military sources, such as from a second job. The service member will be subject to tax in the nonresident state on any nonresident source income earned other than from active duty military sources. Thus, income from a second job in the nonresident state is taxable in the nonresident state because that is where it’s earned.

SCRA, however, introduces a change in how this other income is taxed in the nonresident state; the service member’s active duty military income cannot have the effect of increasing the tax liability assessed on the other non-military state income.

In most states, tax liability is calculated using a nonresident income allocation ratio. States typically calculate a nonresident ratio by dividing the nonresident source income by the total federal income as follows:

NR Ratio = Nonresident state sourced income Total federal income

Calculation of this ratio will be defined by each state and is often calculated directly on the nonresident state’s base form or a supplemental schedule based on the state’s accounting method. This ratio is used to prorate various state tax calculations for the nonresident taxpayer, such as additions, subtractions, personal exemptions, dependent exemptions, state tax credits, and most importantly, state tax liability.

To properly calculate the tax liability on the service member’s nonresident income and ensure the military income does not increase the nonresident tax liability, a practitioner must subtract the military wages from the nonresident state income amount (numerator) and sometimes from the federal income amount (denominator) of the equation. See the Tax Institute’s separate guide, State Nonresident Servicemember & Civilian Spouse Adjustments - SCRA/MSRRA, for specific details relating to these adjustments on each state’s nonresident income tax return.



Military Spouses Residency Relief Act (MSRRA)

The Military Spouses Residency Relief Act of 2009 (MSRRA)2 amends SCRA to offer the same residency retention protections to a servicemember’s spouse who leaves his or her home state to accompany his or her spouse on military orders as SCRA offers to servicemembers. Additionally, a servicemember’s nonmilitary spouse may elect to use the servicemember’s home state for tax purposes even if the two did not previously share the same residence or domicile prior to a military move3.

MSRRA thus modifies some basic rules of taxation with respect to military spouses when:

• The spouse earns income from services performed in a state where the spouse is present solely to be with the servicemember pursuant to military orders and

• The state is not the spouse’s legal domicile

Under these circumstances, and pursuant to 50 U.S.C. §§ 4001(a)(2) and (c), the civilian spouse will not be required to pay income taxes to the nonresident state on income earned for services rendered in the nonresident state. These two provisions create a legal fiction for the spouse: even though the spouse actually may earn income in the nonresident state, the spouse’s income will be taxed in the spouse’s home state. Individual state laws will govern the taxability of home state source income. Practitioners should note, however, that income from sources other than for personal services of the civilian spouse may remain taxable to the nonresident state according to the state’s rules of taxation as they apply to nonresidents.

Many states require nonmilitary spouses of military servicemembers to provide proof that they meet the criteria for state personal income tax exemptions as set forth in the MSRRA.

See the Tax Institute’s separate guide, State Nonresident Servicemember & Civilian Spouse Adjustments - SCRA/MSRRA, for specific details relating to military spouse adjustments on each state’s nonresident income tax return.

2 50 U.S.C. § 4001(a)(2), Pub. L. No. 111-97 (2009), amended by The Veterans Benefits and Transitions Act of 2018 (VBTA), Pub. L. No. 115-407 (Dec. 31, 2018) 3 Under MSRRA of 2009, a spouse who did not have the same domicile as the servicemember prior to moving to a new state on military orders was not afforded protection under the MSRRA. The Veterans Benefits and Transitions Act of 2018 (VBTA), Pub. L. No. 115-407 (Dec. 31, 2018), § 302(a)(2)(B) amends SCRA and MSRRA as it relates to the servicemember’s spouse by adding: “For any taxable year of the marriage, the spouse of a servicemember may elect to use the same residence for purposes of taxation as the servicemember regardless of the date on which the marriage of the spouse and the servicemember occurred.” This amendment removed the “same state” requirement under prior MSRRA.



SCRA / MSRRA Tax Protections Chart Military Taxpayer Civilian Spouse Residency Maintains home state of residency in

state where s/he entered military service unless s/he takes proactive and intentional steps to change domicile. 50 U.S.C. § 4001(a)(1)

Maintains home state of residency or may elect servicemember’s home state for tax purposes if leaves home state to be with servicemember in compliance with military orders. 50 U.S.C. § 4001(a)(2)

Income exempt from tax in nonresident state

Military pay excluded from tax return in nonresident state. 50 U.S.C. § 4001 (b)

All income earned for “services performed”, such as W-2 wages, commissions, tips, are exempt from income in nonresident state; self-employment income should be exempted if earned for personal services. 50 U.S.C. § 4001(c)

Income taxable in nonresident state

Non-military income earned while stationed in nonresident state – e.g. income from a 2nd, civilian job remains taxable in nonresident state. 50 U.S.C. § 4001(b)

Passive income, lottery winnings, and income received for other than personal services remain taxable where earned. 50 U.S.C. § 4001(c)

Nonresident tax computation

Military income cannot have effect of increasing tax liability on “other” non-military pay earned in nonresident state. 50 U.S.C. § 4001(e)

Military income cannot have effect of increasing tax liability on non-exempt income earned in nonresident state. 50 U.S.C. § 4001(e)



Home of Record v. State of Legal Residence (DD2058) Preparing taxes for a military servicemember can present several unique challenges. Correctly ascertaining where the servicemember should file his or her taxes is paramount. The only way to determine if a civilian spouse is eligible for the protections of the MSRRA is to ascertain both the servicemember and the spouse’s correct state of legal residence.

The first question should always be: Where was your permanent duty station during the tax year – in what state?

The second question should always be: “Have you ever filled out a DD2058 and filed it with your payroll department? If so, what state did you list? If no DD2058 has ever been filed, then from what state did you join the military (home of record)?

The answer to the second question tells you the servicemember’s state of legal residence – the state in which they will be filing a resident tax return. The first question, if listing a different state, tells you in which state the servicemember may be required to file a nonresident tax return.

When completing the interview section in our digital/DIY software, the software uses the term “home of record” to designate a taxpayer’s residency rather than “state of legal residence”. The terms can become conflated and misunderstood.

Every tax professional needs to know the following:

The term “home of record” is defined as the state where the individual first enlisted or from where he/she received a commission from one of the branches of armed services. A servicemember’s home of record determines certain benefits, such as travel allowance back to a location when the servicemember is discharged from the military. This designation never changes and is NOT what determines where the servicemember pays taxes.

The term “state of legal residence” refers to a servicemember’s permanent home or domicile, (the state the servicemember considers his/her permanent residence and where they intend to live after being discharged from the military). The “state of legal residence” is considered by the military (“DFAS”) to be the servicemember’s residence for state income tax purposes. In addition, state of legal residence is used to determine qualification for in-state tuition rates, eligibility to vote for federal and state elections and for a will to be probated.

While a servicemember’s “state of legal residence” can be changed in the same manner as any individual can change their domicile, the home of record can only be changed to correct an error, or after a break in military service. Thus, for tax purposes, the term “state of legal residence” should be used rather than “home of record”.

Servicemembers can change their state of legal residence by use of a Form DD2058, State of Legal Residence Certificate.

Practice Tip: Ask the servicemember if s/he has a DD2058 on file and if so, what state it lists as the servicemember’s home of legal residence. This should be the starting point for determining the servicemember’s tax situation.



Community Property States/U.S. Possessions Married taxpayers domiciled in a community property state, U.S. possession, or foreign country are subject to community property rules. Community property laws affect how taxpayers calculate income for federal income tax purposes. Spouses who are domiciled in community property states and filing separate federal income tax returns must split community income, treating half as earned by each spouse, even if one spouse earns all the community income.

State community property laws apply to military retirement pay. Generally, the pay is either separate or community income based on the servicemember’s marital status and the couple’s domicile while the servicemember was in active military service. For example, the military retirement income that a servicemember receives for services performed during marriage and while the couple was domiciled in a community property state is community income. Active military pay earned while married and domiciled in a community property state is also community income. Under the federal tax rules for community income, the servicemember is treated as having received half of the income and the servicemember’s spouse is treated as receiving the other half.

Spouses who maintain separate residences due to temporary absences (such as an absence due to military service where the spouses intend to live together when the spouse in the military returns) are not considered to be living apart for purposes of determining whether the special treatment under IRC §66(a) and Reg. §1.66-2 for spouses living apart all year.

The following states and U.S. possessions follow community property rules:

Arizona Texas

California Washington

Louisiana Wisconsin

Idaho Guam

New Mexico Puerto Rico

Nevada Northern Mariana Islands

*Alaska has a community property “election”

See IRS Publication 555, Community Property

https://www.irs.gov/pub/irs-pdf/p555.pdf



States with the Most Military Personnel or Bases • Alaska • California

• Colorado • Florida

• Maryland • New York

• Oklahoma • Virginia

• South Carolina

States with the Largest Military Bases • Georgia (Fort Benning) • Kentucky (Fort Campbell) • North Carolina (Fort Bragg) • Texas (Fort Hood) • Washington (Joint Base Lewis-McChord)

Federal Extension Rules Many states follow the federal military extension filing rules. Under federal rules, servicemembers who are serving in a combat zone (CZ), contingency operation, or who have been hospitalized because of such service, have at least 180 days after leaving the designated CZ, contingency operation, or hospital discharge to file and pay federal taxes. The IRS will not assess or charge interest and penalties attributable to the extension period.

• In collaboration with the Department of Defense, the IRS identifies taxpayers who are serving in a combat zone to suspend compliance action until 180 days after the taxpayer has left the CZ.

• Servicemembers qualifying for CZ relief may notify the IRS of their status via email at [email protected]. The e-mail should contain:

o Official document that indicates their area of military operation o If civilian, Letter of Authorization stating service in “tax-free zone” or “Combat Zone Tax

Exclusion Area” (CZTE) o Do not include SSN

• Deadline extension provisions apply to most tax actions required to be performed on or after the beginning date for the CZ, or the date service began, whichever is later.

• In general, the deadline is extended for the period of service in a CZ plus 180 days after the last day in a CZ.

• For hospitalizations, the 180-day extension period begins upon discharge. For hospitalization inside the U.S., the extension period cannot be more than 5 years.

Additional Resources IRS Publication 3, Armed Forces’ Tax Guide Extension of Deadlines – Combat Zone Service FAQ

mailto:[email protected]


https://www.irs.gov/newsroom/extension-of-deadlines-combat-zone-service



Alabama Filing Status General rule: Taxpayers, including servicemembers may use a different status on the AL return than

used on the federal return. Married Split Residency: Use “married filing separate” if one spouse is a resident of AL and the

other is a resident of another state.

Extensions No special provisions

Resident Military AL taxes resident servicemembers on military compensation except for:

o military compensation received while serving in a combat zone. o active duty military allowances for quarters, substance, uniforms, and travel.

Servicemembers exclude dividends received on veteran’s life insurance from AL taxable income. AL exempts from tax any payment made by the U.S. Dept. of Defense for any servicemember killed

in action in a designated combat zone in the year s/he is declared deceased. The deceased service-member’s spouse may also claim the exemption for any income s/he earned in the same year.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military service pay is not taxable by AL. A

servicemember who earns only active duty military pay is not required to file an AL tax return. A nonresident servicemember who earns any non-military income in AL or from AL sources is

required to file AL Form 40NR.

Reservist/National Guard Reservists and National Guard members are not taxed on any military allowances received for

quarters, subsistence, uniforms, and travel.

Tax Credits No special provisions

Retirement AL exempts military retirement pay from AL income tax. Retired servicemembers should not include

this pay on Form 40, Part I lines 5a and 5b. AL exempts disability retirement payments (and other benefits) paid by the Veterans Administration

from AL income tax.

Special Filing Rules/Restrictions No special provisions

Additional Resources No additional resources



Arkansas

Filing Status General rule: Servicemembers may use a different status on the AR return than used on the federal

return.

Extensions If a servicemember’s ability to file and pay income tax is affected by military service and the

servicemember notifies the IRS or state authority, the servicemember may defer paying tax up to 180 days after the servicemember’s termination of military service.

o No interest of penalty shall accrue for the period of deferment. o Statute of Limitations – Collections by seizure or otherwise shall be suspended for the

period of military service of the servicemember and for an additional 270 days thereafter.

Resident Military AR resident servicemembers are exempt from AR tax on all service pay and allowances received

while on active duty. Servicemembers must file Form AR1000F and enter excludable income on line 9.

AR resident servicemembers claiming an exclusion for military compensation may not use the low-income tax tables.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military service pay is not taxable by AR. Nonresident servicemembers complete Form AR-NR MILITARY to indicate they are not required to

file AR return. Servicemembers complete and file the Form AR-NR MILITARY one time only to claim this permanent exemption.

A nonresident servicemember’s spouse who meets the requirements of MSRRA requirements is not subject to AR tax and may receive a refund of AR tax withheld by attaching a completed Form AR-MS, along with a copy of servicemember’s Leave and Earning Statement (LES), to Form AR1000NR with “Military Spouse” notated at the top of the return. Enter the total amount of AR withholding on AR1000NR but do not include the exempt income.

A MSRRA qualified spouse should submit a completed payroll withholding form, ARW-4MS to his or her employer yearly to prevent future AR tax withholding.

Reservist/National Guard Reservists and National Guard members are not subject to AR tax on service pay or allowance they

earn. Reservists and National Guard members must file Form AR1000F and enter the exempt income on line 9.

Reservists and National Guard members may deduct expenses, including overnight travel expenses, incurred from participating in the reserves on Form AR1000ADJ.



Tax Credits Servicemembers may not use the Low-Income Tax Tables if claiming an exclusion for military

compensation or retirement.

Retirement Servicemember military retirement income and survivor benefits are completely exempt from AR

income tax for tax years beginning January 1, 2018. Servicemembers enter the gross amount of military pension income on Form AR 1000F / AR1000NR line 17. Beginning with tax year 2018, servicemembers receiving this military pension exemption are disallowed the $6,000 maximum exemption allowed to AR taxpayers for retirement income.

Servicemembers may exempt from AR income tax a military disability pension that falls under IRC § 104(a)(4) if the pension was for personal injuries or sickness due to active service. Retired servicemembers may exempt military retirement pay from active service above and beyond the $6,000 cap to the extent it is based upon a military related disability. Servicemembers claiming an exclusion for military retirement may not use the Low-Income Tax Tables.

Special Filing Rules/Restrictions AR-MS Tax Exemption Certificate for Military Spouse AR applies the federal provision excluding gain from the sale of personal residence for purposes of

computing servicemembers’ AR taxable income.

Additional Resources Arkansas Military Spouses Residency Relief Act Information

http://www.dfa.arkansas.gov/offices/incomeTax/individual/Documents/AR-MS.pdf

http://www.dfa.arkansas.gov/offices/incomeTax/individual/Documents/MilitarySpousesResidencyReliefAct.pdf



Arizona

Filing Status General Rule: Servicemembers may use a different filling status on the AZ return than used on the

federal return. Caution, Community Property States: AZ requires servicemembers domiciled in AZ (or another

community property state filing separate returns) to report their own income taxable to AZ and half of community income taxable to AZ. AZ does not tax military income and servicemembers should not report this income as separate or community income.

Extensions AZ may waive any interest and penalties for late payment or extension underpayment penalty

assessed to a servicemember when the servicemember is outside the U.S. and it is impossible or impractical to file or pay AZ taxes. Servicemembers should submit a written request to the tax audit section of the AZ Department of Revenue explaining the circumstances and requesting a waiver of any interest or penalties. Servicemembers should make this request as soon as possible upon their return to the U.S.

Servicemembers file the return and request for a waiver of interest and penalties separately; but a copy of the request must be attached to the return.

Resident Military AZ does not tax a resident servicemember’s active duty military pay. An AZ resident servicemember and his or her resident spouse must file an AZ return if either spouse

has AZ income other than military pay. Servicemembers filing an AZ return report all income, including military pay, and subtract military pay to the extent it is included in federal AGI by using AZ Form 140, line 32. Full year resident servicemembers may not subtract active duty military pay on Forms 140A or 140EZ. Part year resident servicemembers may subtract active duty military pay on Form 140PY.

AZ resident servicemembers should not file an AZ return if the servicemember: o is an active duty member of armed forces; o earned income only for active duty military service; and o had no AZ tax withheld from active duty military pay.

Nonresident Military Nonresident servicemembers are not subject to AZ income tax on active military pay. A nonresident servicemember who earns non-military income from AZ sources reports such income

on AZ Form 140NR. A nonresident servicemember who is required to file Form 140NR should check box 12 on AZ Form 140NR to exclude active military wages on line 15, Form 140NR.

A nonresident servicemember’s civilian spouse who meets the MSRAA requirements should exclude his/her income in AZ income on Form 140NR line 15 by checking the box on line 14, if they are otherwise required to file an AZ income tax return.



A nonresident servicemember who is required to file an AZ income tax return must prorate dependency exemptions by the portion that represents the proration of AZ AGI to federal AGI. However, a nonresident servicemember is not required to prorate the personal exemption.

Reservist/National Guard Reservists and National Guard members should not file an AZ income tax return if the Reservist or

National Guard member: o is an active service Reservists or National Guard member; o earns income only from active service; and o had no AZ tax withheld from active Reserve/Guard pay.

Reservists or National Guard members required to file AZ Form 140 must include all income, including military pay, and subtract active service compensation on Form 140, line 32, to the extent such pay is included in federal AGI.

Active service compensation includes all pay received for services performed as a Reservist or National Guard members including weekend duty and two weeks a year active duty. However, compensation received by a “military technician (dual status)” for federal civil service employment for the National Guard or for the United States Reserves, is not income received for active service as a National Guard member for a Reserve member even though the employee may be required to wear a military uniform while at work. Additionally, a member of the U.S. Public Health Service or National Oceanic and Atmospheric Administration does not qualify as a servicemember earning active service compensation.

Retirement Servicemembers receiving U.S. government military pension can subtract the lessor of the amount

of the pension received or $3,500 using AZ Form 140, line 29b.

Credits No special provisions


Additional Resources AZ Pub 704, Taxpayers in the Military AZ Pub 705, Spouses of Active Duty Military Members

https://www.azdor.gov/Portals/0/Brochure/704.pdf

https://www.azdor.gov/Portals/0/Brochure/705.pdf



California Filing Status General Rule: Servicemembers use the same filing status for California as they use on the federal

income tax return. Nonresident Spouse Exception: A servicemember or auxiliary military branch member may file

separately for California if either spouse was: o An active duty member of U.S. armed forces or auxiliary military branch during tax year; or o A nonresident for the entire year who has no California source income.

Caution, Community Property States: If the spouse earning the California source income is domiciled in a community property state or territory, the spouses must equally split the community income. Consequently, both spouses will have California sourced income and they will not qualify for the nonresident spouse exception to filing status rules.

Extensions CA allows servicemembers an additional 180 days to file their state tax return and pay tax, without

interest or penalties, after they return from overseas in a noncombat assignment or after they return from a combat zone (CZ) or qualified hazardous duty area (QHDA): o Servicemembers who served in a CZ or QHDA can receive an additional extension (up to 106 days)

for the number of days they were in a CZ or QHDA during the filing period. This is in addition to the 180-day extension.

o Servicemembers serving overseas write “MILITARY OVERSEAS” at the top of the tax return in RED INK. Servicemembers serving in a designated CZ or QHDA write “COMBAT ZONE” and the area serving at the top of the tax return in RED INK.

o Servicemembers serving overseas or serving in a designated CZ or QHDA write the date deployed overseas or the date they entered a designated CZ or QHDA and the date they returned from overseas or from a designated CZ or QHDA. Attach copies of military orders documenting the deployment.

o If both the servicemember and the servicemember’s spouse are in the military, write the information for both spouses and indicate which information belongs to which spouse. The extensions apply to the both spouses regardless of whether they file joint or separate tax returns.

Resident Military CA resident servicemembers stationed in CA are taxed on their military income. CA provides no

exclusions, subtractions, or credits exempting military active duty pay. CA resident servicemembers stationed outside of CA on TDY remain residents of CA. CA resident servicemembers whose permanent duty station is outside of CA are treated as

nonresidents of CA for tax purposes. CA taxes all income received prior to departure. CA taxes CA sourced income earned after departure (excluding such intangibles like interest and dividends). This applies only to PCS and not TDY or sea duty from a CA homeport.

American Indian tribal servicemembers living on an Indian reservation are not taxed on military pay. These servicemembers subtract exempt income on Sch. CA (540 or 540NR), line 1, Column B.



Servicemembers may continue to deduct moving expenses using federal Form 3903. No California adjustment is required.

Nonresident Military Military servicemembers domiciled outside of CA are considered nonresidents for tax purposes when

stationed in CA on PCS orders. A nonresident servicemember’s military pay is not taxed in CA under SCRA, and a servicemember who

earns only military pay is not required to file a CA return. A nonresident servicemember who earns any non-military income in California or from California

sources is required to file and pay California taxes on that California income. Such servicemembers file Form 540NR and report all income, including military income, on Sch. CA (540NR) in column A. These servicemembers exclude military income on Sch. CA (540NR) columns B or E. These servicemembers exclude their military compensation and other non-California sourced income from Sch. CA (540NR), column E.

To claim the adjustment, nonresident servicemembers write “MPA” (Military Pay Adjustment) on Sch. CA (540NR), Part II, line 1 to the left of column A or per their tax software’s instructions.

IRA Adjustment – Nonresident active duty servicemembers whose IRA deduction was subject to the federal AGI limitation should recompute their IRA deduction reported on Sch. CA (540NR), line 19 by removing their active duty military pay. Servicemembers calculate the adjustment on Sch. CA (540NR), line 22 and write “MPA Adjustment” on the dotted line next to line 22.

A servicemember’s civilian spouse who meets the MSRRA requirements will not include his/her income in CA income on Sch. CA (540NR), line 1 column E. However, the spouse must include his/her income in total income on Sch. CA (540NR), line 1 column D.

The Veterans Benefits and Transition Act of 2019 allows the spouse of a servicemember to make the election to use the same residence for tax purposes, as the servicemember (regardless of the marriage date). If the spouse makes the election write “VBTA” at the top of the tax return in RED INK.

Reservist/National Guard Reservists and National Guard members who stay overnight more than 100 miles away from their

home while in service can deduct unreimbursed travel expenses on Sch. CA (540), Section C, Line 11. California National Guard Surviving Spouse & Children Relief Act of 2004 - California exempts from

gross income any death benefits received from the State of California by a surviving spouse, registered domestic partner, or member-designated beneficiary of certain military personnel killed in the performance of duty. “Military personnel” includes the California National Guard, State Military Reserve, or the Naval Militia. Taxpayers who reported a death benefit in “other income” on Sch. CA (540), line 8, column A may subtract the death benefit amount in column B.

Deployed Military Exemption – Deployed servicemembers who are the sole owner of a small business are eligible for the Deployed Military Exemption. The business is not subject to the minimum franchise tax or the annual tax if the servicemember owner was deployed during the tax year operated at a loss or ceased operation. To claim the exemption, servicemembers should write “Deployed Military” in black or blue ink in the top margin of the corporation or LLC’s tax return.



Retirement Military Retirement Pay: CA taxes military retirement pay received by CA residents. This applies to

all military pension income received while the retiree is a CA resident regardless of where the retiree was stationed or domiciled while on active duty.

o Exception: California does not tax military retirement pay received by an American Indian tribal member residing on his/her tribal reservation.

Servicemembers receiving Combat-Related Special Compensation (CRSC), a special compensation for qualified combat-related disabilities, exempt CRSC payments from California tax.

Tax Credits CA Earned Income Tax Credit: Servicemembers may elect to include all (and/or all the spouse’s or

registered domestic partner’s, if filing jointly) nontaxable military combat pay in earned income for purposes of calculating the California EITC, regardless if s/he elected not to include it for federal purposes. Servicemembers making this election must include all nontaxable military combat pay.

Child & Dependent Care Credit: Resident and nonresident servicemembers include in earned in come all military compensation (including combat zone pay) in earned income when calculating this credit. However, income earned by a servicemember’s spouse that is not taxed pursuant to MSRAA is not considered earned income from CA sources. Both spouses must have CA earned income to qualify for this credit.

Renter’s Credit: Nonresident servicemembers do not qualify for this credit. The servicemember’s spouse or registered domestic partner may claim this credit if s/he a California resident, did not live in military housing during tax year, and is otherwise qualified.

o Servicemembers, and other taxpayers, do not qualify for this credit if their rented property is exempt from property taxes. Exempt property includes most government-owned buildings, including military barracks.

Special Filing Rules/Restrictions E-filing Restrictions – none Paper Filing – none (see Extensions for special processing for military extensions)

Additional Resources FTB Pub 10324, Tax Information for Military Personnel FTB Pub 1001, Supplemental Guidelines to California Adjustments FTB Military

4 At the time of this publication the 2020 FTB Pub 1032 was not available.

https://www.ftb.ca.gov/forms/2019/2019-1032-publication.pdf

https://www.ftb.ca.gov/forms/2019/2019-1001-publication.pdf

https://www.ftb.ca.gov/file/personal/filing-situations/military.html



Colorado

Filing Status General Rule: Servicemembers and spouses (joint or separate) must use the same filing status for

CO as used on the federal return.

Extensions CO allows servicemembers stationed in a combat zone to postpone filing and paying state income

taxes until 180 days after their assignment in the combat zone ends. Interest and penalties are deferred during this period. If the return is filed under this 180-day extension, servicemembers should write the name of the applicable combat zone across the top of CO Form 104.

Resident Military CO full year resident servicemembers are taxed in the same manner as all other CO residents.

Resident servicemembers are taxed on all income regardless of source, unless an exception applies. Combat Zone: CO does not tax military pay earned in a combat zone that qualifies for the federal

tax exemption. However, CO taxes combat zone income that does not qualify for the federal exemption. Servicemembers whose only source of income is federally exempt military compensation are not required to file a CO return.

Colorado is HOME Act: An active duty servicemember (1) whose home of record is CO and (2) who loses CO residency after January 1, 2016 (i.e. chooses residency elsewhere), may reacquire CO legal residency, even without a physical presence in CO, if the servicemember does one of the following:

• Registers to vote in CO.; • Purchases residential property or an unimproved lot in CO; • Titles and registers a motor vehicle in CO; • Notifies the state of previous legal residence of the intent to make CO the state of legal

residence; or • Prepares a new last will and testament declaring that CO is the state of legal residence.

Servicemembers who reacquire residency may: • Subtract active duty service pay to the extent included in federal taxable income on DR

0104AD, line 16; • Not file CO taxes if their only source of income is federally exempt military income; and • Not have CO taxes withheld taxes on federally exempt military income.

Servicemembers and spouses who are full-year CO residents and who spend at least 305 days outside of the 50-state boundary of the U.S. for active duty service may file as a nonresident on their CO return by marking the “nonresident 305-day rule Military” indicator on Form 104PN.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by CO. Nonresidents are taxed by CO only on non-military income derived from CO sources (e.g. wages

from a nonmilitary job, rental income from property located in CO, etc.). Servicemembers earning non-military income must pay CO tax and Form 104PN.



MSRRA qualified spouses can prevent CO withholding on wages earned in Colorado by submitting a completed DR 1059 to the employer when hired. Additionally, MSRRA qualified spouses must submit a completed DR 1059 to the CO DOR, along with a copy of their military ID card with Form 104PN yearly.

Reservist/National Guard No special provisions


Retirement Retired servicemembers under age 55 at the end of the tax year may claim the military retirement

subtraction of $7,500 on Form DR 0104AD line 5 or 6, subject to limitations. Retired servicemembers at least 55 at the end of the tax year may claim the regular pension and

annuity subtraction on line 3 or 4 of Form DR 0104AD for retirement benefits included in federal taxable income, subject to limitations.

• Retirees 55 – 64 may deduct up to $20,000 • Retirees 65+ may deduct up to $24,000

Special Filing Rules/Restrictions CO will not accept a military power of attorney. Taxpayers must use Form DR 0145, Power of

Attorney.

Additional Resources Colorado Publication FYI Income 21 – Military Service Members Military Service Members FYI - Income 21: Military Servicemembers

https://www.colorado.gov/pacific/sites/default/files/DR0145_2013.pdf

https://www.colorado.gov/pacific/sites/default/files/DR0145_2013.pdf

https://www.colorado.gov/pacific/sites/default/files/2019.12_Income21.pdf

https://www.colorado.gov/pacific/tax/military-service-members

https://www.colorado.gov/pacific/sites/default/files/2019.12_Income21.pdf



Connecticut

Filing Status General Rule: Use the same filing status for CT as used on federal income tax return. Married Non-MSRRA Qualified Spouse: If the servicemember and spouse reside together, and the

non-military spouse does not qualify for the MSRRA exemption, the residency or nonresidency, and filing status, may be affected. If the servicemember’s spouse does not qualify for the exemption under the MSRRA, the filing status is as noted below:

o Married Filing Jointly if: the servicemember is a resident of CT and the spouse is a nonresident of CT, and

both spouses elect to be treated as residents of CT for the entire taxable year; or the servicemember and spouse are both nonresidents of CT and only one spouse

has non-military income derived from or connected with sources within CT, and both spouses elect to file a joint CT income tax return; or

the servicemember and spouse are both part-year residents of CT and have the same period of residency; or

the servicemember and spouse are both CT residents and the filing status for federal income tax purposes is married filing jointly.

o Married Filing Separately if: the servicemember is a resident or nonresident of CT and the spouse is a part-year

resident of CT; or the servicemember and spouse are both part-year residents of CT but do not have

the same period of residency; or the servicemember is a resident of CT and the servicemember’s spouse is a

nonresident of CT, and both spouses do not elect to be treated as CT residents; or the servicemember and spouse are both nonresidents of CT, only one spouse has

CT-sourced income (other than military pay) with sources within CT, and the couple elects not to file a joint return.

Extensions Servicemembers who serve in a combat zone or contingency operation file their CT income tax

return no later than 180 days after the later of: o The last day of service in a combat zone or contingency operation or the last day the area is

designated as a combat zone or contingency operation; or o The last day of continuous hospitalization inside or outside CT because of wounds, disease,

or injury incurred while serving in a combat zone or contingency operation. Spouses of servicemembers and civilians supporting the armed forces in a combat zone or

contingency operation who are away from their permanent duty stations but are not within the designated combat zone or contingency operation, are also eligible for the extension.

Qualifying individuals requesting an extension should print both the name of the combat zone or contingency operation and the operation they served with at the top of their CT return. This is the same combat zone or contingency operation name printed on the federal income tax return.



Resident Military CT resident servicemembers stationed in CT include base military pay in CT taxable income and file

CT Form 1040 Combat Zone: CT does not tax combat pay and hostile fire or imminent danger special pay. CT resident servicemembers who are assigned to another state or country may file as nonresidents

if they meet the specific requirements for the “Group A exception” or “Group B exception” as outlined on pages 6-9 of Informational Publication 2019(5) (extensive examples are provided). A military or non-military resident may file as a nonresident if the taxpayer meets all of the conditions for either the Group A exception or Group B exception as set forth below:

Group A exception, the taxpayer: o did not maintain a permanent place of abode in CT for entire taxable year; o did maintain a permanent place of abode outside of CT for the entire taxable year; and o did not spend more than an aggregate of 30 days in CT during the taxable year Group B exception, the taxpayer, during any period of 548 consecutive days: o is present in a foreign country, or countries, for at least 450 days; o did not spend more than 90 days in CT and did not maintain a permanent place of abode in

CT at which spouse (unless legally separated from spouse) or minor children spent more than 90 days; and

o is not present in CT for a number of days which does not exceed an amount that bears the same ratio to 90 as the number of days contained in the nonresident portion of the taxable year bears to 548 during a taxable year in which the 548-day period either began or ended.

Number of days in the nonresident portion/548 X 90 = maximum number of days allowed in CT.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by CT.

Nonresident servicemembers with no income other than active duty military pay are not required to file a CT income tax return.

Nonresident servicemembers are taxed on non-military CT sourced income and must file CT Form 1040NR/PY. Subtract military pay on line 51 of CT Form 1040NR/PY.

A nonresident servicemember’s armed forces pension is not CT-sourced income.

Reservist/National Guard No special provisions. See “Retirement” below.


Retirement Veterans receiving disability pensions and any other benefits are treated the same for CT tax

purposes as for federal income tax purposes. Veterans exclude these benefits from CT income tax if these amounts are excludable from gross income for federal income tax purposes.

https://portal.ct.gov/-/media/DRS/Publications/pubsip/2019/IP-2019(5).pdf?la=en



Retired servicemembers, including retired National Guard members, subtract retirement pay received from the U.S. government from federal AGI when computing CT AGI. To the extent the retirement paid is included in federal AGI, the retired servicemember subtracts military retirement pay on Form CT-1040, Line 44 (resident) or Form CT-1040NR/PY, Line 46 (non-resident, or part-year resident).

o Survivor benefits received by a beneficiary under an option or election made by a retired member, and that began upon the member’s death, are also excluded from CT AGI.

o A former spouse of a retired servicemember that receives payments as part of a divorce or dissolution decree does not qualify for the retirement pay exclusion.

CT does not treat Armed Forces pension as CT sourced income earned by CT nonresidents

Special Filing Rules/Restrictions A servicemember’s MSRRA qualified spouse who had CT income tax withheld from his/her wages

may file a claim for refund of any amount withheld from wages by paper filing Form CT-1040NR/PY, Connecticut Nonresident and Part-Year Resident Income Tax Return, and writing “Military Spouse” across the top of the return. Attach the following documents:

o A letter signed by the military spouse stating that he or she is claiming the MSRRA exemption on the wages earned in CT and that he or she meets all the requirements to claim the exemption under the MSRRA;

o A copy of the servicemember’s Leave and Earnings Statement; and o A copy of the military ID issued to the military spouse.

If a servicemember dies while on active duty in a combat zone or because of injuries received in a combat zone:

o No income tax or return is due for the year of death or for any prior taxable year on or after the first day serving in a combat zone.

o Any tax due for those years which is unpaid at the date of death, including interest, additions to tax, and penalties, if any, will not be assessed. If assessed, the assessment will be abated, and if collected, it will be refunded to the legal representative of the estate.

o If any tax was previously paid for those years, the tax will be refunded to the legal representative of the estate or to the surviving spouse upon the filing of a return on behalf of the decedent.

o When filing on behalf of a deceased servicemember, enter zero tax due and attach a statement to the return along with a copy of the death certificate.

Additional Resources Military Information, CT DRS website Information Publication 2019(5), CT Income Tax Information for Armed Forces Personnel and

Veterans

http://www.ct.gov/drs/cwp/view.asp?a=1462&q=509828

https://portal.ct.gov/-/media/DRS/Publications/pubsip/2019/IP-2019(5).pdf?la=en



District of Columbia

Filing Status General Rule: Taxpayers, including servicemembers, use the same filing status on the DC return as

used on the federal return. If more than one filing status applies, the servicemember should use the filing status that will result in the lowest tax.

Extensions Servicemembers who are serving in a designated CZ may receive an extension of up to an additional

6 months to file their D.C. income taxes as well as pay any amounts that are due. Mark the “Military Combat Zone” indicator at the top of Form FR-127. During the period of extension, assessment and collection deadlines are extended and no penalty and interest will be charged. The extension also applies to spouses, whether they file joint or separate returns.

Resident Military Active duty military income earned by D.C. residents is taxable and reported on Form D-40.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by DC.

Nonresident servicemembers that are otherwise required to file a DC return, deduct military compensation on Schedule I, line 14.

MSRRA-qualified spouses are not subject to tax on income earned in the District. The spouse may file Form D-4A, Certificate of Nonresidence in the District of Columbia, with his/her employer to claim exemption from D.C. withholding.

Keep a copy of the Dept. of Defense form providing the servicemember’s legal residence with the nonresident servicemember’s tax records.



Retirement No special provisions





Delaware

Filing Status General Rule: Taxpayers, including servicemembers, may use a different filling status on the DE return

than used on the federal income tax return.

Extensions No special provisions

Resident Military DE resident servicemembers may exempt combat pay from DE income tax to the extent that the

combat pay is excludable from federal gross income.

Nonresident Military A nonresident servicemember’s military pay is not taxed in DE under SCRA, and a servicemember

who earns only military pay is not required to file a DE return. A nonresident servicemember who earns any non-military income from DE sources must file and

pay DE taxes on that income. Nonresident servicemembers who are required to file a return must include all income on Form 200-

02 in Column 1, lines 1 to 14 and subtract military compensation in Column 1, line 16. MSRRA-qualifying spouses are not subject to tax by DE and can file an Annual Withholding Tax

Exemption Certification, Form W-4DE, to be exempted from DE withholding on their paychecks.




Special Filing Rules/Restrictions Tax relief for death related to service in combat zone, terroristic, or military action:

o DE does not tax the servicemember in the tax year of his/her death if the death occurred while serving in a CZ or was due to wounds, disease, or injury while serving in a CZ.

o DE does not impose income tax in the tax year of the death of a servicemember if the death occurred because of wounds or injury incurred while serving outside the U.S. during a terroristic or military action.

Additional Resources Personal Income Tax FAQs (Military)

https://revenuefiles.delaware.gov/docs/w4de.pdf

https://revenue.delaware.gov/frequently-asked-questions/personal-income-tax-faqs/



Georgia

Filing Status General Rule: Servicemembers use the same filing status for GA as used on the federal income tax

return. Nonresident Spouse Exception: A servicemember may file jointly or separately, regardless of federal

filing status, if one spouse is a resident and the other is a nonresident without any GA-source income.

Extensions GA allows resident servicemembers serving outside of the continental U.S. an automatic extension

to file their GA return of six months after returning to continental U.S. No penalties or interest will accrue during this period.

Servicemembers who are hospitalized because of injuries sustained while serving in a designated combat zone or who are imprisoned by forces opposing the United States while serving in a combat zone receive an extension for filing their GA income tax return for the period of service in the combat zone, plus the period of continuous hospitalization attributable to an injury, plus any period of confinement, and the next 180 days.

Resident Military GA taxes resident servicemembers on all income, regardless of source, including military pay, unless

otherwise specifically exempt by GA law. Servicemembers who are killed in combat or deceased because of injuries incurred in combat are

exempt from all GA income taxes in the year of their death. This exemption applies to any prior taxable year ending on (or after) the first day the servicemember served in the combat zone.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by GA.

Nonresident servicemembers must file a GA return only if they receive non-military GA sourced income.

If a nonresident servicemember is required to file a GA return, the nonresident servicemember files GA Form 500 and completes Schedule 3 to calculate GA taxable income.

MSRRA qualified spouses can prevent GA withholding from their pay by checking the applicable box in Section 8 of GA Form G-4 and returning Form G-4 to the employer. The employer must submit Form G-4 to the GA Dept. of Revenue as provided on Form G-4.

Reservist/National Guard National Guard members and Reservist serving in a combat zone or stationed in defense of the

borders of the U.S. pursuant to military orders may exclude, to the extent included in federal AGI, military compensation earned the during the period covered by the military orders. The servicemember claims the exclusion by attaching a copy of the federal return with the GA return.

https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/TSD/Form/TSD_Employees_Withholding_Allowance_Certificate_G-4.pdf



National Guard and Air National Guard members who are on active duty for more than 90 consecutive days can claim a tax credit for the cost of qualified life insurance premiums paid through the servicemember’s group life insurance program. The servicemember claims the credit on Form IND-CR.

Tax Credits See “Reservist/National Guard” above.

Retirement A resident who is a “disabled veteran” is exempt from tax on disability income received from the

U.S. Dept. Of Veterans Affairs if the payment is for: (i) Loss or permanent loss of use of one or both feet; (ii) Loss or permanent loss of use of one or both hands; (iii) Loss of sight in one or both eyes; or (iv) Permanent impairment of vision of both eyes

A “disabled veteran” is any wartime veteran discharged under honorable conditions and who is at least 90 percent totally and permanently disabled.


Additional Resources Withholding and Taxation of Certain Nonresident Military Spouses (Policy Statement IT-2019-01)

https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/LATP/Policy%20Bulletin/2018%20Withholding%20and%20Taxation%20of%20Military%20Spouses.pdf



Hawaii

Filing Status General Rule: Taxpayers, including servicemembers, may use a different HI filing status than used

on the federal income tax return. Married Split Residency:

o Joint Resident Income Tax Return: The taxpayer may file a joint HI resident tax return. However, all the income of both spouses must be included on the HI income tax return, regardless of source, from the date the resident spouse establishes residence in HI.

o Married Filing Separate Resident Tax Return: The taxpayer may file a separate HI resident income tax return, instead of a joint resident income tax return. The resident spouse is taxed on all regardless of source, at the rates applicable to married individuals filing separate income tax returns

Extensions Servicemembers serving in a combat zone may receive an extension of 180 days after the date the

servicemember leaves the combat zone.

Resident Military HI does not tax military pay received by servicemembers while in a combat zone. HI forgives income tax for servicemembers who die while on active duty in a combat zone or

because of wounds, diseases, or injuries incurred while serving in a combat zone. Servicemembers who are not eligible for combat zone benefits may defer collection action for up to

six months after the period of military service if the servicemember’s ability to pay is materially impaired because of the member’s military service. Servicemembers may request deferral by sending to the Department of Revenue a copy of the notice of tax due and attaching a written request with the servicemember’s name, social security number, monthly income and source of income before military service, and date they are eligible for discharge (and, if possible, a copy of their orders).

HI imposes an interest rate of 8% per year on outstanding tax liabilities. To use the 6% interest rate under the SCRA, active duty servicemembers must send a written request for relief to the HI Dept. of Revenue, along with a copy of their orders or reporting instructions detailing their call to active duty.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by HI. Nonresident servicemembers are not required to file a HI income tax return unless they receive non-

military HI sourced income such as rental income or non-military wages. Nonresident’s receiving non-military HI sourced income must file Form N-15.

A servicemember’s nonresident spouse who does not qualify for protections under MSRRA is taxed on HI sourced income and must file Form N-15.



Reservist/National Guard Reservist and National Guard members may exclude up to $6,943 (for tax years beginning after

2019) of military pay received from taxable income. • Servicemembers should enter on Form N-11, line 15 the smaller of (a)$6,943, or (b) the

amount of the servicemember’s pay Form W-2, box 16. • If the servicemember is married and filing a joint return, and both spouses qualify, the

exclusions for both spouses should be added and the total should be entered on line 15.


Retirement HI does not tax qualifying distributions from military pensions. Retired servicemembers subtract

qualifying distributions from a military pension by using Form N-11, line 13.


Additional Resources Tax Information Release No. 90-10: Clarification of Taxation and the Eligibility for Personal

Exemptions and Credits of Residents and Nonresidents in the Military and Spouses and Dependents of Persons in the Military.

Tax Information Release No. 2003-2: Extension of Deadlines and Other Tax Relief for Members of the Armed Forces, Reserves, and Hawaii National Guard

Tax Information Release No. 2010-01: Military Spouses Residency Relief Act (“MSRRA”) Tax Facts 97-2: Income Tax Information for Nonresident Military Servicemembers

http://files.hawaii.gov/tax/legal/tir/1990_09/tir90-10.pdf

http://files.hawaii.gov/tax/legal/tir/1990_09/tir03_02.pdf

http://files.hawaii.gov/tax/legal/tir/tir10-01.pdf

http://files.hawaii.gov/tax/legal/taxfacts/tf97-2.pdf



Iowa

Filing Status General Rule: Servicemembers use the same filing status for IA as they used on the federal income

tax return. Married Taxpayers: A taxpayer, including a servicemember, and spouse filing a joint federal return

can file separately using either (a) Status 3, married filing separately on a combined return, or (b) Status 4, married filing separate returns: o If a nonresident servicemember’s resident spouse has IA-source income it may be beneficial to

use filing status 3 (married filing separately on the combined return form). o Nonresident spouses without IA sourced income may use filing status 3 or 4 (married filing

separately on the combined return or married filing separate returns).

Extensions IA grants all active duty servicemembers in the armed forces (including Reservists and National

Guard members) deployed outside the U.S. an extension of 180 days to file and pay, without interest or penalty, IA income taxes after leaving the combat zone (CZ), the hazardous duty area (HDA) or ceasing to participate in a contingency operation.

Servicemembers hospitalized because of injury or illness in a CZ or HDA have five years to file and pay, without interest or penalty, IA income taxes after leaving the combat zone or hazardous duty area.

The 180-day extension applies to spouses of servicemembers filing a combined return. To claim the extension, servicemembers (or their spouses, authorized agents and taxpayer

representatives) notify the IA DOR by providing: o The servicemember’s name, and spouse’s name, if applicable. o The servicemember’s stateside address, and spouse’s address, if applicable. o The servicemember’s date of birth, and spouse’s date of birth, if applicable. o The date the servicemember was deployed to the CZ or other qualifying area. o An official document that indicates the servicemember’s area of operation.

Resident Military IA excludes active duty military pay from taxable income. Active duty servicemembers (including

Reservists and National Guard members) include active duty pay received from the federal government for military service performed as income on line 1 (wages) of Form IA 1040 and deduct the same active duty pay on line 24 (other adjustments).

When calculating the income threshold to file a tax return, servicemembers do not include income received from excludable active duty service. For example: a married couple, IA residents and under the age of 65, whose combined income totals $50,000 with $40,000 of that income representing pay for active duty may not have to file a tax return. This is because their combined income, without the military pay, is $10,000 which is below the MFJ threshold of $13,500.

IA forgives income tax when a servicemember is killed in a combat zone, missing in action or presumed dead, killed outside the US due to terrorist or military action.



Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by IA. If required to file an IA tax return, nonresident servicemembers do not include military pay on line 1

of the IA 1040 and also do not report it as IA income on the IA 126. In general, this applies only to active duty military and does not include the National Guard or Reserve personnel.

MSRRA qualifying spouses report all IA source income report all IA source income on IA 1040, but show no Iowa wages, salaries, tips or Schedule C income on IA 126.

Reservist/National Guard National Guard members who are performing active military service for the military or at the

direction of the federal government can exclude pay received from the federal government for military service performed.

National Guard members employed full-time in the National Guard doing duty for the state are not considered in active duty status and their pay is not excluded from IA tax.

If a Reservist or National Guard member is called to active state or federal duty and makes a withdrawal from a qualified retirement account, the amount of the withdrawal is not subject to IA income tax or state tax penalty. If this income is reported as taxable pension income on line 9 of the IA return, the servicemember enters that amount on line 24 of the IA 1040 (other adjustments).

Tax Credits IA offers property tax credits for servicemembers and veterans including: o The Disabled Veteran Homestead Tax Credit adopted to encourage home ownership for

disabled veterans. The current credit is equal to 100% of the actual tax levy. o The IA Military Exemption reduces the taxable value of property for military veterans. o Military student loan exemption – Servicemembers, Reservists, and National Guard members

may exempt student loan repayments from IA Income tax if the individual is on active duty at the time of the loan repayment. Include the repayment amount on line 1 of the IA 1040 and deduct on line 24 under “other adjustments”.

Retirement IA excludes military retirement benefits from taxation, for both resident and nonresidents, without

age restrictions. Survivor benefits received under U.S.C. 1447 are also excluded. The military retirement benefits exemption is in addition to the general $6,000/$12,000 pension exclusion available to IA taxpayers 55 years of age or older.

Special Filing Rules/Restrictions IA accepts the federal Power of Attorney form or a Military Power of Attorney if it contains a written

statement, initialed by the taxpayer, indicating it is being submitted for use with the IA forms.

Additional Resources Iowa Military Tax information Iowa Tax Responsibilities of Military Personnel Military Loan Exemptions IA § 422.7(42)/IAC § 701-- 40.63 Military Spouse Residency Relief Act

https://tax.iowa.gov/military-tax-information

https://tax.iowa.gov/expanded-instructions/iowa-tax-responsibilities-military-personnel-0

https://www.legis.iowa.gov/docs/ACO/rule/10-31-2012.701.40.63.pdf

https://tax.iowa.gov/expanded-instructions/military-spouses-residency-relief-act-3



Idaho

Filing Status General Rule: Servicemembers must use the same filing status for ID as they use on the federal

income tax return. Married, Split Residency: Resident servicemembers on active duty outside ID who are married to a

part year ID resident or nonresident must file ID Form 43. Resident servicemembers on active duty outside ID who are married to ID residents file ID Form 40.

Caution - Community Property State: Resident spouses filing separate returns must divide equally between them the community income, withholdings, and deductions of both spouses. The community property should include only the income earned during the time the couple was married. These spouses must include with the tax return a copy of any written agreement between them regarding the separation of assets and income.

Extensions ID follows the federal rules on 180-day extensions for servicemembers serving in a combat zone.

For a more a more in-depth discussion, see IRS Publication 3. Servicemembers must write "COMBAT ZONE" and the date of deployment in red on top of the ID return.

Resident Military Resident servicemembers stationed in ID report all military and non-military income, regardless of

source, on Form 40, line 7. ID does not tax the military pay earned outside of ID by resident servicemembers on continuous and

uninterrupted active duty for 120 days or more (which do not need to be in the same tax year). A resident servicemember who files Form 40 subtracts this military pay on Form 39R, line 11.

ID exempts military pay earned while serving in a combat zone or hospitalized for injuries or illness sustained in a combat zone.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by ID. A nonresident servicemember who earns more than $2,500 of non-military gross income from ID

sources must file ID Form 43 and pay ID tax. A nonresident servicemember’s civilian spouse who meets the MSRRA requirements can claim an

exemption from withholding on wages by filing Form ID-MS1 with an employer.

Reservist/National Guard ID follows federal guidelines and no tax is owed for enlisted or warrant officer’s military pay

received while serving in a combat zone. Commissioned officer pay exclusion is capped at the highest enlisted pay plus any hostile fire or imminent danger pay.

National Guard members should write "COMBAT ZONE" and the date of deployment in red ink at the top of the return.




Tax Credits Grocery Credit: Resident servicemembers on active duty military may qualify for a refund of the

grocery credit. Credit for Taxes Paid to Another State: Resident servicemembers on active military duty use Form

39NR, Part D when computing the credit for taxes paid to another state.

Retirement Retired servicemembers may subtract from taxable income on ID Form 39R, line 8 (residents) or ID

Form 39NR, line 22 (nonresidents or part-year residents), any retirement benefits paid by the U.S. if they are (1) at least 65 years old or (2) at least 62 years old and disabled. Married taxpayers filing separate returns cannot claim this subtraction.

Special Filing Rules/Restrictions Spouses of servicemembers serving in a combat zone may sign the joint income tax return for the

servicemember without a power of attorney. The spouse attaches a signed statement to the return that explains the servicemember is serving in a combat zone. Spouses filing an electronic return should keep a copy of the statement with the federal Form 8453.

Additional Resources Idaho Tax Commission Military

https://tax.idaho.gov/i-1011.cfm



Illinois

Filing Status General Rule: Taxpayers, including servicemembers, use the same filing status for IL as used on the

federal return. Servicemembers and spouses who file separate federal returns must file separate IL returns.

Married, Split Residency: Spouses who file a joint federal return may elect to file a joint IL return or to file “married filing separately”.

o If filing a joint IL return where one spouse is a resident and the other is a nonresident, both spouses are treated as IL residents (or as part-year residents for the same period).

o If filing a joint federal return and one spouse is a full-year IL resident while the other is a part-year resident or a nonresident, spouses may choose to file “married filing separately.”

Extensions IL grants an automatic six-month extension of time to file a return. If a taxpayer receives a federal

extension of more than six months, the taxpayer IL automatically grants the same extension for IL.

Resident Military Resident servicemembers must file Form IL-1040 and report all income. However, resident

servicemembers use Schedule M, to subtract all tax-exempt military pay included in federal AGI (Form IL-1040, line 1).

A servicemember’s tax-exempt military pay includes: o pay for duty in the armed forces, including basic training, o pay for duty as a cadet at the U.S. Military, Air Force, and Coast Guard academies, as a

midshipman at the U.S. Naval Academy, or in ROTC, o pay for duty for serving in the U.S. Armed Forces Reserves or a National Guard unit, including a

National Guard unit of another state, and o income on which federal income tax is forgiven due to death in a combat zone or death resulting

from a wound, disease or injury incurred in a combat zone. Part-year resident servicemembers must file Form IL-1040 and Schedule NR. A part-year resident

servicemember’s generally includes military pay in IL AGI on Schedule NR, Step 3, Line 5, Column B. Part-year resident servicemember’s include in IL AGI (1) all income earned while a resident regardless of whether such income is earned from IL sources, and (2) all income earned from IL sources while a nonresident. However, servicemembers may subtract tax-exempt military pay included as income in Line 5, Column B, on Step 4, Line 44, Column B of the Schedule NR.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by IL. A nonresident servicemember must file an IL tax return if [s]he has earned enough non-military

taxable income from IL sources to have a tax liability (i.e., IL base income from Schedule NR, Nonresident and Part-Year Resident Computation of IL Tax, is greater than the IL exemption allowance from Schedule NR)



A nonresident MSRRA qualified civilian spouse files Form IL-1040 and Schedule NR if [s]he received income from IL sources other than wages earned as an employee, or if IL income tax was withheld in error. A nonresident civilian spouse claims an exemption from IL income tax withholding, by providing employers a completed Form IL-W-5-NR.

Reservist/National Guard National Guard members file Form IL-1040 and report all income. However National Guard

members subtract tax-exempt military pay for duty for service as a Reservist or National Guard member in any state by using Schedule M, if the income is included in federal AGI.


Retirement IL does not tax military retirement pay received by IL residents. Retired servicemembers subtract the

amount of any federally taxed portion of military retirement pay on Form IL-1040 and attach a copy of the first page of the federal return to IL-1040. If retirement income is not clearly identified on federal form 1040, retired servicemembers should attach a copy of Form 1099-R.


Additional Resources Illinois Filing Requirements for Military Personnel, Publication 102

https://www2.illinois.gov/rev/research/publications/pubs/Pages/default.aspx



Indiana

Filing Status General Rule: Taxpayers, including servicemembers, use the same filing status for IN as used on the

federal income tax return.

Extensions IN allows servicemembers on active duty outside of the U.S. and Puerto Rico on the filing date an

automatic 60-day extension of time to file. Servicemembers must include a statement verifying that they were outside the U.S. or Puerto Rico on the filing date.

Servicemembers serving in a combat zone receive an automatic extension of 180 days after leaving the combat zone. Servicemembers hospitalized outside of the U.S. as a result of service in a combat zone are allowed an extension of 180 days after release from the hospital. Servicemembers claiming the extension write “Combat Zone” across the top of the return (above the Social Security number).

Resident Military IN resident servicemembers receive a military service deduction for the actual amount of military

income received (i.e. military pay, retirement pay and/or survivor’s benefits) or $5,000, whichever is less. If both the servicemember and spouse received military income, they may each claim the deduction for a maximum of $10,000. Servicemembers deduct military pay on Form IT-40 Sch, 2 (or Form IT-40PNR Sch. C) and must attach a copy of their military W2 to their tax return when claiming this credit.

IN does not tax combat zone pay. Therefore, a resident servicemember earning combat zone income does not include combat zone when computing the military service deduction.

All IN counties impose local income taxes. Resident servicemembers are subject to a local option income tax if they reside in IN as of January 1 of the tax year. However, a resident servicemember who maintains a household outside the state of IN is not subject to a county tax.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by IN. Nonresident servicemembers with non-military income from Indiana sources file an IN tax return. If the servicemember files a joint federal income tax return with his/her spouse and one spouse is a

part or full-year ID nonresident file Form IT-40PNR. Compute the amount of a servicemember’s spouse’s income that is exempt from IN income tax by

completing Sch. IN-2058SP, Nonresident Military Spouse Earned Income Deduction. Nonresidents are ineligible for the military service deduction or the National Guard and Reserve

members deduction.

Reservist/National Guard National Guard and Reserve members may deduct qualified military income received during the

period if (1) deployed and mobilized for full time service, or (2) their Indiana National Guard unit was federalized.



Members of the reserve components of the Army; the Navy; the Air Force; the Coast Guard; the Marine Corps; the Merchant Marine, IN Army National Guard, or IN Air National Guard are eligible for the National Guard and Reserve member deduction.

Servicemembers cannot claim both the National Guard/Reserve deduction and the resident military service deduction (see above) on the same income. However, servicemembers may claim both deductions in the same year on separate income.

Military income earned while in a combat zone is not taxable on IN income tax returns. Since IN is not taxing this income, combat zone income is not eligible for a deduction.

Servicemembers should claim the National Guard/Reserve deduction on IN Form IT-40 Sch. 2 using code 621.

Tax Credits Servicemembers stationed outside the U.S. on extended active duty (for an indefinite period of a

period of more than 90 days) are considered to be living in the U.S. for purposes of the Earned Income Credit. Servicemembers are considered to be serving on extended active duty once they begin serving extended active duty, even if they do not serve more than 90 days.

Retirement Retired servicemembers or their surviving spouses may deduct up to $6,250 plus 50% (TY21-75%,

and TY22 -100%) of the amount exceeding $6,250 for military retirement or survivor benefits received while a resident of IN and included in gross income. Claim this deduction on Form IT-40 Sch. 2 or Form IT-40PNR Sch. C. This deduction is in addition to the $5,000 deduction for resident servicemembers. Full exemption available beginning tax year 2022.

Special Filing Rules/Restrictions Overseas military addresses must contain the APO, FPO designation in the “city field” along with a

two-character “state” abbreviation of AE, AP, or AA and the zip code. Place these two- and three-letter designations in the city name area.

Additional Resources Information for Military Servicemembers, Indiana DOR website Information Bulletin #27, Indiana Adjusted Gross Income Tax Applicable to Military Personnel and

Spouses Information Bulletin #6, Civil Service Annuity Adjustment and Military Retirement or Survivor’s

Benefit Deduction

http://www.in.gov/dor/4734.htm

http://www.in.gov/dor/files/ib27.pdf

https://www.in.gov/dor/reference/files/ib06.pdf



Kansas

Filing Status General Rule: Servicemembers use the same filing status for KS as used on the federal income tax

return. Married, Split Residency: If married taxpayers file a joint federal return and one spouse is a resident

and the other is a nonresident, KS taxable income is reported and taxed based on a joint nonresident KS return.

Extensions Servicemembers have 180 days after returning from the combat zone or from the date released

from continuous qualified hospitalization due to injuries sustained while serving in a combat zone to file their KS income tax return, without incurring any interest or penalties. Servicemembers claim the extension by attaching a statement to the KS tax return, stating they were on active duty in the combat zone and providing the date they returned to the U.S.

Resident Military KS taxes resident servicemembers on all income, regardless of source, unless specifically exempted

by statute. KS does not tax a servicemember’s combat pay to the extent included in federal AGI. However, KS

limits the amount of exclusion for commissioned officers to the highest rate of enlisted pay (plus imminent danger/hostile fire pay).

Servicemembers subtract on Sch. S any recruitment, sign up or retention bonus received as incentive to join, enlist or remain in the armed forces (including KS Army and Air National Guard), to the extent included in federal AGI.

Servicemembers subtract on Sch. S. amounts received for repayment of education or student loans received because of service in the Armed Forces, to the extent included in federal AGI.

If a married servicemember files a joint federal return and one spouse is a resident and the other is a nonresident, KS taxable income is reported and taxed based on a joint nonresident KS return. The married servicemember uses Part B, Nonresident Allocation, on the back of Schedule S, Form K-40 to determine the percentage of income from KS sources and the proportion of tax owed to KS.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by KS. Nonresident servicemembers stationed in KS must file a KS return if receiving non-military income

from KS sources. Nonresident servicemembers subtract military compensation on Form K-40, Sch. S. Civilian spouses of nonresident servicemembers qualifying for MSRRA subtract KS source income on

Sch. S.





Retirement Retired servicemembers exclude from KS income any amounts received as retirement benefits

received for their service in the Armed Forces to the extent included in federal AGI by subtracting the included military benefits on KS Form K-40.


Additional Resources Kansas Individual Income Tax Instructions for Armed Forces Personnel IA-36

http://www.ksrevenue.org/pdf/ia-36.pdf



Kentucky

Filing Status General rule: Taxpayers, including servicemembers, may select a filing status that is different than

the federal filing status

Extensions KY honors any extension granted to servicemembers for federal income tax purposes for KY income

tax purposes. Servicemembers serving in a designated as a combat zone have 12 months from the end of their

deployment in the combat zone to file their tax return and pay any taxes that become due during their combat deployment. This combat zone extension also applies to National Guard and Reserve servicemembers who are called to active duty to serve in a combat zone.

Resident Military KY exempts from taxable income all military pay received by active duty resident servicemembers.

Servicemembers claim this exemption by subtracting military income on Form 740 Schedule M, line 13 if the military pay is included in their federal AGI.

KY income tax should not be withheld from military pay, and any income tax that is withheld will be refunded by the KY DOR.

Servicemembers who are killed in the line of duty are exempt from KY income tax on all income, military or otherwise, in the year of their death and the prior year. This exclusion includes all federal and state death benefits but does not include the income of the servicemember’s spouse if the servicemember is married. The estate of a deceased servicemember can file an amended return, within the statute of limitations, to access this benefit for the year prior to death.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by KY. Nonresident servicemembers are not required to file a KY return unless they have non-military

income. Servicemembers who must file a KY return should subtract military income on 740-NP as, an “other deduction” in Column A with a notation “nonresident military income.”

The MSRRA qualifying spouse of a servicemember should subtract their income on Form 740-NP, Section B, Line 30 (other deductions), Column A with a notation “military spouse income” and check the Military Spouse box on the top of the Form 740-NP.

Reservist/National Guard Reservists and National Guard members are exempt from KY income tax on active duty pay. These

servicemembers claim the exemption by subtracting military income on Form 740 Sch. M, if the military pay is included in federal AGI.

Reservists and National Guard members serving in a combat zone are allowed an extension of 12 months from the end of their deployment in the combat zone to file their tax return and any pay any taxes that become due during their combat deployment.

KY National Guard members are eligible for the personal credits as set forth below in “Tax Credits”.



Tax Credits KY National Guard personal credits: A taxpayer who is a member of the National Guard on the last

day of the tax year, is eligible to claim personal tax credits ($20) on Section B, line 3/7 of Sch. ITC and enters the personal credit amounts from Sch. ITC, Section B, lines 3/7 on Form 740, line 17. This credit is available to KY National Guard members only; it does not apply to Reservists or members of the Armed Forces.

Retirement No special provisions. Special Filing Rules/Restrictions No special provisions

Additional Resources Military Exemption, KY Dept. of Rev.

https://revenue.ky.gov/Individual/Pages/Military-Exemptions.aspx



Louisiana

Filing Status General Rule: Taxpayers, including servicemembers, use the same LA filing status as used on the

federal return.

Extensions Servicemembers are eligible for an automatic extension of time to file if assigned to a federally

designated combat zone, beginning from the date the servicemember starts serving in the combat zone and extending to 180 days after leaving the combat zone. Servicemembers seeking a combat extension should note the name of the combat zone and the dates of service in the combat zone at the top of the return when filing and on the envelope.

All LA tax filers, including servicemembers, may request an extension of time for filing not to exceed 6 months from the date the LA income tax return is due. Taxpayers must electronically file the extension request at www.revenue.louisiana.gov/fileonline before the due date of the return.

Resident Military Resident servicemembers stationed out-of-state for 120 or more consecutive days on active duty

may be entitled to an exemption of up to $30,000 of the military income earned out-of-state. Servicemembers may exempt the portion of compensation earned outside of LA during and after the 120+ consecutive days of active duty, up to the $30,000 limit, on Form IT-540, Schedule E using code 10E. The servicemember must provide a copy of their official orders, including any endorsements, that document and establish the 120+ days of out-of-state active duty.

For credits available to resident servicemembers, see “Tax Credits” section below.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by LA. Nonresident servicemembers must report any non-military LA sourced income on Form IT-540B. MSRRA qualifying spouses must report all income other than wages, interest or dividends on Form

IT-540B, marking an ‘X’ in the “MSRA” box on the face of the return.


Tax Credits Resident servicemembers may claim a credit for income tax paid to another state on nonmilitary

income or on income earned by his/her spouse if that income is included on the LA return. Resident servicemembers claim the credit by completing Schedule C, Nonrefundable Priority 1 Credits.

Retirement Federal Retirement Benefits Exclusion: Federal retirement benefits received by federal retirees,

both military and nonmilitary, may be excluded from LA taxable income by using Schedule E.

http://www.revenue.louisiana.gov/fileonline



Special Filing Rules/Restrictions Married taxpayers with a split residency status where one spouse is a LA resident and one spouse is

a LA nonresident may elect to either file a LA resident return (IT-540) or a nonresident return (IT-540-B), whichever provides the greatest benefit.

Additional Resources RIB No. 07-022, Military Pay Exclusion from Louisiana Income Tax (2007) RIB No. 10–005, Military Spouses Residency Relief Act (2010) RIB No. 10-006, Withholding Income Tax under the Military Spouses Residency Relief Act (2010)

http://revenue.louisiana.gov/LawsPolicies/RIB07022.pdf

http://www.revenue.louisiana.gov/LawsPolicies/RIB10005.pdf

http://revenue.louisiana.gov/LawsPolicies/RIB10006.pdf



Maine

Filing Status General Rule: Servicemembers use the same filing status for ME as used on the federal income tax

return. Split Residency Status: In the case of a married couple who filed a joint federal return where one

spouse is a full-year ME resident and the other spouse is not; the couple has two filing options: o File a joint ME return as if both taxpayers were full-year ME residents, in which case they

may qualify for the Credit for Income Tax Paid to Other Jurisdictions; or o File a ME return as single using Form 1040ME with Schedule NRH.

If the nonresident or “safe harbor” resident spouse has no ME sourced income, that spouse does not have to file a ME Return.

If one spouse is a full-year ME resident and the other spouse is a nonresident, the ME resident spouse must file as a single individual using Schedule NRH.

Nonresident & Safe-Harbor Residents: In the case of a married couple who filed a joint federal return, if both spouses are ME nonresidents or “safe harbor” residents but only one spouse has ME sourced income, the couple has two filing options:

o File a joint ME return and determine the joint tax liability as nonresidents using Form 1040ME with Schedule NR; or

o The spouse with ME sourced income can choose to file a return as a single individual using Form 1040ME with Schedule NRH.

Extensions Servicemembers serving in a combat zone or a contingency operation outside the US, or who have

qualifying service outside of a combat zone receive an automatic extension for filing their ME income tax return and paying income taxes if they meet federal extension requirements, regardless of whether the servicemember claimed a federal extension. Spouses of servicemembers serving in a combat zone or contingency operation, and support personnel serving in a combat zone or a contingency operation under the direction of the armed forces are eligible for the extension.

The deadline for filing ME income tax returns and paying the taxes due is extended for 180 days after the later of:

o The last day the servicemember serves in a combat zone, has qualifying service outside of a combat zone, or serves in a contingency operation (or the last day the area qualifies as a combat zone or the operation qualifies as a contingency operation), or

o The last day of any continuous qualified hospitalization for injury from service in the combat zone or contingency operation or while performing qualifying service outside of the combat zone.

Servicemembers are entitled to an extension, in addition to the 180 days, of up to the number of days that were left for them to file or pay when they entered a combat zone (or began performing qualifying service outside the combat zone) or began serving in a contingency operation. If the servicemember entered the combat zone or began serving in the contingency operation before the expiration of the period ordinarily allowed for filing or paying, their deadline is extended by the



entire period remaining for filing or paying at the time they entered the combat zone or began serving in the contingency operation.

ME applies the extension upon receipt of a copy of the servicemember’s deployment orders. Otherwise, untimely requests for a credit or refund due to service in a combat zone or other qualified service must be in writing and will be considered on a case by case basis.

Resident Military Resident servicemembers subtract qualifying active duty military pay on Schedule 1S to the extent

included in federal AGI. A servicemember earns qualifying active duty military pay for services performed:

• Outside ME under written military orders showing a permanent duty station outside of ME. • In support of a federal operational mission or a declared state or federal disaster response

when the orders are either at federal direction or at the direction of the ME Governor. ME excludes any combat zone pay that is excluded from federal AGI. ME grants a waiver from ME income tax for the same period or periods in which a servicemember’s

federal income tax liability is forgiven under IRC §692 due to a combat casualty.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by ME. ME taxes a nonresident servicemember’s non-military pay earned in ME. Nonresident

servicemembers who are required to file a ME tax return subtract active duty military pay on Schedule 1S.

ME does not tax a nonresident servicemember’s income from intangible sources, e.g., interest and dividends.

Reservist/National Guard A ME resident who is serving on active military duty as a ME National Guard member or Reservist

member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard may subtract from ME income active duty military pay earned, to the extent included in federal AGI, using Schedule 1S. The income must be pursuant to orders from the federal government or ME Governor and in support of a federal operational mission or a declared state or federal disaster response

o A “federal operational mission” is limited to activity in support of overseas deployment and excludes standard duty activity, such as training and administrative activities.


Retirement ME exempts from tax retirement and pension benefits received under a military retirement plan,

including survivor benefits. The deduction applies to retirement plan benefits received from service in the U.S. Army, Navy, Air Force, Marines, or Coast Guard. Retired servicemembers should complete the Pension Income Deduction Worksheet to exclude this income on Schedule 1S, line 4.



ME does not tax annuity payments made to the survivor of a deceased military servicemember as a result of service in the active or reserve components of the U.S. armed services under a survivor benefit plan (10 U.S.C., c. 73). Include the subtractions on Schedule 1S, line 6, to the extent included in federal AGI and not included in the pension deduction on line 4.


Additional Resources Combat Zone Tax Relief - Maine Guidance Documents FAQ Maine’s Veteran’s Pension Income Tax Exemption Maine Rule 807 (Feb. 2017) – Residency, Military Personnel Individual Income Tax FAQ #1

https://www.maine.gov/revenue/taxes/income-estate-tax/guidance-documents

https://www11.maine.gov/veterans/docs/Maine%20Veterans%20Pension%20Exemption%20FAQ%20(3).pdf

http://www.maine.gov/revenue/rules/pdf/rule807_feb2017.pdf

https://www.maine.gov/revenue/faq/individual-income-tax



Massachusetts

Filing Status General Rule: Servicemembers follow the same filing status rules as non-military filers. Married Taxpayers: Married couples may file a joint or separate return. However, MA does not

allow joint filing unless both spouses maintain MA residency for the same portion of the year. This filing restriction will not apply to resident servicemembers who are out of state solely due to military orders.

Extensions MA follows the federal rules. Servicemembers serving in a combat zone or hospitalized because of

such service receive an extension for the filing and payment of income taxes. This extension is also available to individuals serving in a combat zone in support of the armed forces. The extension period is for the time of service in the combat zone area or hospitalization attributable to such service plus 180 days.

Special Processing for Extensions: o Taxpayers claiming an extension of time to file a return or pay tax under this provision

should write "COMBAT ZONE" on the income tax envelope and on the top of the income tax return when filing.

o If filing electronically, taxpayers should write "COMBAT ZONE" next to their name, or if necessary, on one of the address lines on the form, along with the date of deployment.

Resident Military MA follows the federal tax rules for taxing military income and excludes income earned during

service in a combat zone.

Resident servicemembers include all other military service compensation in MA gross income.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MA. MA taxes the non-military pay of nonresident servicemembers that was earned in MA or from MA

sources. These servicemembers file Form 1-NR/PY and: o May exclude military service compensation as non-MA sourced income when determining

qualifications for No Tax Status or the Limited Income Credit. o Must include military service compensation as non-MA sourced income when determining the

deduction and exemption ratio. MSRRA qualified spouses must file Form M-4 MS, Annual Withholding Tax Exemption Certificate for

Nonresident Military Spouse, with employers to avoid withholding on wages and other MA nontaxable income.

A servicemember's MSRRA qualified spouse who has MA personal income tax withheld but did not submit a form M-4 MS must paper-file a Form 1-NR/PY MA Nonresident Income Tax Return, to claim a refund. No e-file returns are allowed. The qualifying spouse must write "MSRRA," across the top of the Form 1 NR/PY and attach copies of the following:

1. Military Spouse ID card;



2. Department of Defense Form 2058, State of Legal Residence Certificate – "legal residence for purposes of withholding state income taxes from military pay;"

3. LES, Leave and Earnings Statement of service member; and 4. Servicemember's current military orders assigning such service member to a post of duty in

or near MA.

Reservist/National Guard Reservists and National Guard members may claim a deduction for unreimbursed overnight travel,

meals and lodging expenses for travel of more than 100 miles from home to perform services as a Reservist or National Guard member. Enter the amount from U.S. Form 1040, Schedule 1, Line 11 and fill in the appropriate indicator on Schedule Y, Line 9.


Retirement MA exempts from taxable income noncontributory military pension income and military

survivorship benefits received from the U.S. uniformed services (Army, Navy, Marine Corps, Air Force, Coast Guard, commissioned corps of the Public Health Service and National Oceanic and Atmospheric Administration). If the pension is exempt, retired servicemembers enter “0” on Form 1, line 4 and note the source on the dotted line to the left.

o Generally, pensions associated with service in the MA National Guard do not qualify for this exclusion.

o All or part of pension income of military veterans who began MA state service prior to July 1, 1939 and retired under Mass. Gen. Law c.32, §§ 56–60 may be subject to MA tax.

o Original plan contributions of veterans who elected to receive the proceeds from contributions in a lump-sum distribution remain nontaxable.

o Noncontributory pension income received after a lump-sum distribution remains fully taxable and the taxpayer should report this amount on Form 1, line 4.

Special Filing Rules/Restrictions Retired servicemembers who were domiciled in MA for 6 months immediately prior to entry into the

Armed Forces and were discharged under honorable conditions should mark the veteran’s indicator on Form 1, if the taxpayer or the taxpayer’s spouse is a veteran who served in the Armed Forces of the United States in active service as part of Operation Enduring Freedom, Operation Iraqi Freedom, Operation Noble Eagle or Sinai Peninsula. The DOR will then forward the name and address to the Department of Veterans’ Services and the adjutant general of the MA National Guard to verify eligibility for any benefits to which the taxpayer may be entitled.

Additional Resources Guide to Personal Income Tax, Military Personnel - Massachusetts Department of Revenue

http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/special-provisions/military-personnel.html



Maryland

Filing Status General Rule: Servicemembers use the same filing status for MD as used on their federal income tax

return. Married Taxpayer Exception: Married taxpayers who filed a joint federal return may file separate

MD returns if: o One spouse is a resident and the other spouse is a nonresident, o The spouses are domiciled, or maintain principal place of abode, in different counties on the

last day of the taxable year (applies to resident taxpayers only), o The spouses have different taxable periods, or o The Comptroller determines circumstances warrant.

Extensions MD recognizes the same combat zone extensions as the IRS. Servicemembers and support personnel

serving in a combat zone receive a 6-month extension to file and pay income taxes. Servicemembers who are hospitalized because of injuries sustained in a combat zone qualify for this extension. Servicemember’s spouses may claim this extension whether they are filing joint or separate returns. Servicemembers receive this extension by entering “912” on the code lines to the right of the telephone number in the signature block on their MD income tax return.

Resident Military Resident servicemembers must file Form 502 and report all income, regardless of source or where

they are stationed. Resident servicemembers fill in the lines on Form 502 for their physical address, including political

subdivision lines, based on the physical address that they use for claiming MD as their Home of Record.

Servicemembers earning $30,000 or less from military pay can subtract from taxable income up to $15,000 of military pay earned while in active service outside U.S. boundaries or possessions. Servicemembers claim this subtraction by using Form 502SU, line p.

MSRRA qualified spouses are not required to file a MD return if the servicemember’s income consists of solely military pay and the civilian spouse’s income from MD sources consists of solely service income.

• MSRRA qualified spouses should file Form MW507M with their employer to stop MD withholding.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MD. Nonresident servicemembers with income from real or personal property in MD or other non-

military income must report income on Form 505 and subtract military pay included in federal AGI on Form 505 and Form 505NR.



Nonresident married servicemembers with a resident civilian spouse with income that are filing a joint MD return may not submit Form 502 electronically and must complete and attach to the joint residential return a pro forma Form 505 and 505NR.

Reservist/National Guard See “Retirement” below.

Tax Credits No special provisions.

Retirement Servicemembers or their spouses receiving military retirement income may subtract up to $5,000

of military retirement income, including death benefits, from federal AGI. Retired servicemembers age 55 or older may subtract up to $15,000 of military retirement income, including death benefits. Servicemembers may claim this subtraction by using Form 502, line 13, code letter u, or Form 502SU, line u.

Special Filing Rules/Restrictions Nonresident married servicemembers with a resident civilian spouse with income and married

couples with different states of domicile that are filing a joint MD return may not submit Form 502 electronically and must complete and attach to the joint residential return a pro forma Form 505 and 505NR.

MD will abate tax liability for servicemembers who die while in active service in a combat zone or from wounds, disease, or injury incurred while in active service in a combat zone. A tax return must be filed to obtain an abatement and the abatement will apply to the tax year in which the servicemember died and any earlier tax year ending on or after the first day the servicemember performed active service in a combat zone.

Additional Resources Administrative Release 1- Military Personnel and Civilian Spouses Administrative Release 37 – Domicile and Residency

http://taxes.marylandtaxes.com/Resource_Library/Tax_Publications/Administrative_Releases/Income_and_Estate_Tax_Releases/ar_it1.pdf

http://taxes.marylandtaxes.com/Resource_Library/Tax_Publications/Administrative_Releases/Income_and_Estate_Tax_Releases/ar_it37.pdf



Michigan

Filing Status General Rule: Servicemembers follow the same filing status rules as non-military filers and should

use the same filing status as used on the federal return. Married Taxpayer Exception: A servicemember and spouse filing a joint federal return must file a

joint MI return. However, a servicemember and spouse filing separate federal returns may file either joint or separate MI returns.

Extensions Servicemembers, and their spouses, receive an extension for filing and paying MI income tax while

the servicemember is in a combat zone and for 180 days after if the servicemember serves in a combat zone or qualified hazardous duty area, receives hostile fire or imminent danger pay while serving in direct support of a combat zone, or hospitalized outside of the U.S. because of injuries suffered in a combat zone.

Servicemembers claiming the extension write the words “Combat Zone” in the preparer notes if e-filing the MI return or at the top of page 1 of MI-1040 if paper filing the MI return.

Resident Military MI does not tax military pay but requires all residents to file Form MI-1040 regardless of where

earned. Servicemembers file Form MI-1040, Schedule 1 and Schedule W and subtract military pay to the extent it is included in federal AGI.

MI does not tax military survivor benefits that are exempt from federal income tax. Survivor benefits classified as military compensation or military retirement pay may be deducted to the extent they are included in federal AGI for the surviving spouse only.

The servicemember’s standard deduction is reduced by the amount of any military pay included in federal AGI and subtracted from MI income on MI Schedule 1, line 14.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MI.

Nonresident servicemembers with non-military MI sourced income should file Form MI-1040 and Schedule NR, and Schedule 1 and Schedule W if applicable.

Reservist/National Guard MI exempts as military pay the following pay earned by National Guard members:

• Weeknight and regular weekend drills. • Summer camp. • Pay received for riot duty only if nationalized by the president of the U.S. • Public Health Officers pay only for those assigned to the Coast Guard or who are

nonresidents of MI. • Pension/Retirement benefits.



Tax Credits Servicemembers may claim the Qualified Disabled Veterans Exemption totaling $400 (in addition to

other exemptions) if: (a) the taxpayer or spouse is a qualified disabled veteran, or (b) a dependent of the taxpayer is a qualified disabled veteran. To be eligible for the additional exemption, the servicemember must be a veteran of the active military, naval, marine, coast guard, or air service who received an honorable or general discharge and has a disability that was incurred or aggravated in the line of duty as described in 38 USC 101(16). This additional exemption may not be claimed on more than one tax return.

Retirement Retired servicemembers may deduct military and MI National Guard retirement benefits to the

extent they are included in federal AGI. If the servicemember’s surviving spouse had military or MI National Guard retirement benefits taxed and/or withheld, then subtract such benefits on MI Schedule 1, line 11 or line 14 and report withholdings on Schedule W, Table 2. Retired servicemembers who deduct military or MI National Guard retirement benefits may have lower deduction limits if such retirement benefit deductions total more than a certain amount.

MI taxes military retirement benefits that pass to a beneficiary other than a surviving spouse.

Special Filing Rules/Restrictions Schedule W, Michigan Withholding Tax Schedule

Additional Resources Tax Information for Military Personnel Bulletin 22 of 2013, P.A. 161 of 2013 Disabled Veterans Exemption MI Department of Treasury, Is National Guard pay considered military pay?

http://www.michigan.gov/taxes/0,4676,7-238-43513-378076--,00.html

http://www.michigan.gov/documents/treasury/Bulletin22of2013_442604_7.pdf

https://www.michigan.gov/taxes/0,4676,7-238-75545_43715-153964--,00.html#:%7E:text=Only%20the%20following%20National%20Guard,therefore%20exempt%20from%20Michigan%20tax%3A&text=Pay%20received%20for%20riot%20duty,the%20president%20of%20the%20U.S.



Minnesota

Filing Status General rule: Servicemembers use the same filing status for MN as they used on their federal

income tax return.

Extensions Servicemembers serving in an official combat zone or contingency operation receive an extension to

file and pay MN income tax up to either 180 days from the last day in a CZ or the last day of continuous hospitalization for injuries sustained while serving in a CZ.

Servicemembers claim the extension by writing "serving in a combat zone” on a separate sheet of paper and enclosing it with Form M1 within 180 days of the above events.

Servicemembers stationed outside the U.S. who are not serving in a combat area have until October 15 to file a state tax return without penalty. These servicemembers must pay at least 90% of their MN income tax by April 15 to avoid a late payment penalty. The servicemember must pay the remaining balance when they file their return. MN will assess penalty and interest on any tax not paid by the regular due date.

Reservists or National Guard members called to active service are allowed an extension to file and pay their MN income tax. o Members serving in the U.S. have until October 15 to file and pay MN income tax without

penalty. o Members serving in a CZ receive the same extension as active duty personnel serving in a CZ. o Members serving outside of the U.S. not in a CZ receive an extension of 180 days after their

return from the CZ. When filing the MN return Reservists or National Guard members should write “filing under a military extension” on a separate sheet of paper and enclose it with Form M1.

Resident Military Active Duty Military Pay Exclusion: Servicemembers may subtract active duty military pay for

services performed under military orders from MN taxable income on Schedule M1M, line 27. Servicemembers serving in the U.S. Armed Forces, the United Nations Armed Forces, and Active Guard Reserve (AGR) may claim this subtraction.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MN. Nonresident servicemembers who are required to file Form M1 subtract their active duty military

pay using Form M1M and determine their MN taxable income by using Schedule M1NR. MSSRA-qualified spouses are exempt from Minnesota tax on personal service income from services

performed in Minnesota. Exclude exempt income on Schedule M1NR per state filing instructions. Other MN-sourced income may remain taxable to MN. A spouse with a MN filing requirement.



Reservist/National Guard Reserve & National Guard Pay Exclusion: Reservists, National Guard, or MN National Guard

members may subtract federally taxed Reserve or Guard pay from MN taxable income on Schedule M1M, line 28 for training and certain types of qualifying service: o State active service, including natural disaster emergency response and missing person searches o Federally funded state active services such as airport security duty, active duty for special work,

and service under Title 10 and Title 32 Active Guard Reserve. o Training, including annual training and drill weekends. For National Guard members, this

includes training and meetings, whether inside or outside of MN. Active Duty Military Pay Exclusion: Reservists or National Guard members who were called to

federal active duty may exclude active duty pay on Schedule M1M, line 27 instead of line 28.

Tax Credits Credit for Service in a Combat Zone: MN allows resident servicemembers a $120 credit for each

month or part of a month the servicemember served in a combat zone. o This credit is separate from the income tax and can be filed any time during the year and can

be claimed by the servicemember’s surviving spouse or personal representative. o Servicemembers are eligible to receive this credit if they:

Served in a CZ or qualified hazardous duty area anytime on or after Jan. 1, 2013 Received combat pay that was excluded from federal gross income Are a MN resident

o Servicemembers claim the credit by completing Form M99 for the year they served in a CZ or hazardous area and must file it within 3 ½ years from the original due date of the applicable tax return.

o Supporting documentation required: Taxpayers claiming credit on behalf of a deceased taxpayer: Include Form M23 Reservists, National Guard members, and retired or discharged active-duty

members: Attach a copy of Form DD-214, Certificate of Release or Discharge from Active Duty, for each period of qualifying service

Active-duty servicemembers: Attach a copy of Leave and Earnings Statement(s) for each month in qualifying status.

Credit for Past Military Service: Military veterans, including Reservists and National Guard members, may qualify for a tax credit of up to $750 for past military service.

o To determine the amount of credit, the servicemember completes the worksheet for Schedule M1C.

o Servicemembers who subtract military retirement pay from their MN taxable income cannot claim this credit.

o Part-year resident and nonresidents of MN may qualify for the credit using the percentage of MN income from Schedule M1NR.

o To qualify, the veteran must have separated from military service before the end of the year and one of the following must be true: The servicemember served at least 20 years in the military,



The servicemember has a service-connected disability rating of 100% total and permanent (as rated by the U.S. Department of Veterans’ Affairs), or

The servicemember was honorably discharged and received a pension or other retirement pay for their military service.

Retirement Pension & Retirement Subtraction: Retired servicemembers may subtract military retirement pay

on Schedule M1M, line 32 if it is taxable on their federal return and if the pay was received for service in an active military component, service in a reserve component, or as a survivor benefit plan payment. Servicemembers claiming this subtraction may not claim the nonrefundable credit for past military service.

Special Filing Rules/Restrictions Tax Debt Relief for Deceased Active-duty Military: MN provides tax relief to the family of any

servicemember who dies during active service in the United States or United Nations armed forces. o The servicemember’s income will not be taxed in the year of their death. o Any unpaid tax debts or penalties incurred during the servicemember’s prior years of service

will be abated. o The servicemember’s heirs may request a refund of income tax the member paid while in

active service within seven years of when the member’s return was filed, or when the tax was paid or collected.

A family member claiming the refund must file Form M1X, Amended Minnesota Income Tax, and note on the form that the refund claim is for a servicemember who died while in active service. The family member must include a copy of the death certificate and Schedule M23, Claim for a Refund Due a Deceased Taxpayer.

Additional Resources Military Service Members, MN Dept. of Revenue Credit for Military Service in a Combat Zone, MN Dept. of Revenue

https://www.revenue.state.mn.us/military-service-members

https://www.revenue.state.mn.us/credit-military-service-combat-zone



Missouri

Filing Status General Rule: Use the same filing status for MO as used on the federal income tax return.

Extensions MO extends the deadlines for filing tax returns, paying taxes, or filing claims for refunds for at least

180 days for servicemembers serving in a CZ; serving outside a CZ when service qualifies for hostile fire or imminent danger pay; hospitalized outside Missouri due to wound, disease, or injury from service in a CZ; or deployed outside the U.S. away from the servicemember’s permanent duty station while participating in a contingency operation. • The extension is 180 days after the last day in the CZ or contingency operation, plus the days left

to act on a matter with the Missouri DOR when the servicemember entered the CZ or contingency operation. Servicemembers will not be charged interest or penalties attributable to the extension period.

• When e-filing include the notation, “Combat Zone” in the preparer notes. • When filing a paper return, print “Combat Zone” in ink on the top of page 1.

Resident Military Resident servicemembers deduct all active duty military wages included on the federal return on

Form MO-1040, line 17. Attach a Leave and Earnings Statement and a copy of the servicemember’s Military Orders when filing.

Resident servicemembers stationed outside of MO may qualify as MO nonresidents for tax purposes, which allows them to exempt their military income, interest, and dividends if they:

o Did not maintain a permanent residence in MO o Did maintain permanent living quarters outside of MO o Did not spend more than 30 days in Missouri in the tax year

Servicemembers treated as nonresidents under this 3-part test should file a MO-1040 and a MO-NRI. Note: if a resident servicemember’s civilian spouse remains in MO for more than 30 days, while the servicemember is stationed outside MO, the servicemember’s total income, including military pay, remains taxable in MO.

MO does not tax combat pay. This income should be excluded from federal AGI, and therefore not require any adjustment on the MO return. However, if combat pay was taxed on the servicemember’s federal return, s/he may subtract it on Form MO-A, Part 1. line 10 (mark appropriate box).

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MO. Nonresident servicemembers that earn non-military MO sourced income or who married a MO

resident civilian are required to file both Form MO-1040 and Form MO-NRI and use Form MO-A, Part A, line 10 to subtract their military pay from Missouri income.



Nonresident servicemembers with only military income can complete a No Return Required Military Online Form at https://sa.dor.mo.gov/nri/. However, servicemembers filing solely for a refund of Missouri tax withheld should instead file Forms MO-1040 and MO-NRI.

Reservist/National Guard MO Army Reserve and MO National Guard may qualify for the military pension exemption.

Tax Credits Disabled Veterans Property Tax Credit: Veterans who are 100% disabled because of military service

are eligible for a property tax credit claimed on Form MO-1040, line 40 or Form MO-1040P, line 17. Qualified veterans must file Form MO-PTS with MO-1040 and provide a letter from the Dept. of Veteran’s Affairs (VA) as verification.

Retirement Military Pension Exemption: MO exempts military pensions from MO tax. Retired servicemembers

subtract military pension income on MO-A, Part 3. MO requires attachment of the of federal income tax return and Forms 1099-R/SSA-1099. MO National Guard and MO Army Reservists are included in the definition of military for the purposes of the military pension exemption.

Special Filing Rules/Restrictions MSRRA qualified spouses with income of more than $600 must file Form MO-1040 and provide

verification of MSRRA qualification. MO will accept the following as verification: a copy of the spouse’s filed current tax year home state income tax return, property tax receipts from the tax year in question, a current driver’s license, vehicle registration, or voter ID card. The MSRRA qualified spouse must also include the servicemember’s income with their own on Form MO-A, Part 1, line 10 as a “Military (Nonresident)” subtraction to federal AGI.

Additional Resources Military Information Military Reference Guide

https://sa.dor.mo.gov/nri/

http://dor.mo.gov/military/

http://dor.mo.gov/forms/Military%20Reference%20Guide.pdf



Mississippi

Filing Status General Rule: Servicemembers use the same filing status for MS as used on the federal return. MFS Exception: Married taxpayers who filed separate federal returns may elect to file separate or

joint MI returns.

Extensions MS has no special provisions CZ extensions, but recognizes extensions of time granted by the IRS for

filing tax returns.

Resident Military MS does not tax pay up to the maximum enlisted pay amount for any month served in a CZ,

qualified hazardous duty area, or during hospitalization resulting from wounds, disease or injury incurred while serving in a CZ.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MS. Non-

military MS-sourced income remains taxable in MS. Servicemembers should report this income on Form 80-205 and subtract military active duty pay on line 38.

Reservist/National Guard Reserve/National Guard Pay Exemption: MS provides Reserve and National Guard members a

statutory income exemption of the lesser of $15,000 or actual Reserve/National Guard pay. Claim the exemption on Form 80-105, line 54/80-205, line 55.

Tax Credits Active duty servicemembers may deduct moving expenses when required by military orders. Attach

federal Form 3903 to Mississippi return.

Retirement Veteran’s retirement pay and veteran’s disability pension amounts are exempt from MS tax. MS exempts federal and state retirement income from MS tax. Servicemembers should not report

retirement income on Form 80-105, line 45 or 80-205, line 46.


Additional Resources Military Spouses Residency Relief Act Individual Income Tax FAQs – MS DOR

https://www.dor.ms.gov/Notices/indiv_msrra.pdf

https://www.dor.ms.gov/Pages/Individual-FAQs.aspx#80



Montana

Filing Status General Rule: Taxpayers, including servicemembers, may use a different filing status than used on

the federal income tax return. Married couples filing a joint federal return may file either joint or separate MT income tax returns.

File as "married filing separately on separate forms" if one spouse is a resident and the other is a nonresident. Both spouses must file a return if they each have MT sourced income. Otherwise, only the MT resident must file a MT return.

Extensions MT follows the federal rules on 180-day extensions for servicemembers serving in a CZ or

contingency operation. Clearly write “combat zone or contingency operation extension” in red ink on the top of the Form 2. MT will not assess penalties or interest to servicemembers who file the return within 180 days after their last day in a CZ.

Resident Military MT residents, including servicemembers stationed outside of MT, report all income, regardless of

source. Servicemembers may exempt basic, special, and incentive pay received while serving active duty as

a member of the regular armed forces to the extent included in federal AGI on Form 2, MT Subtraction Schedule, line 13.

MT does not tax military pay received in a CZ. Commissioned officers who have combat pay included in their federal AGI may subtract such pay from MT taxable income on Form 2, MT Subtraction Schedule, line 13.

Servicemembers may not exempt salary received for annual training and inactive duty training.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by MT. MSRRA-qualifying spouses are not subject to MT tax on personal service income (wages or

compensation) earned in MT. Nonresident servicemembers and their spouses who earn Montana-source income, such as rental

income from real property located in Montana, remain subject to MT tax on that income and must report it on a MT nonresident return. Servicemembers who have such a filing requirement will exempt military compensation on Form 2, MT Subtraction Schedule, line 13.

Reservist/National Guard National Guard and Reservists deduct on Form 2, MT Subtraction Schedule, line 13 active duty salary

for serving as member of a unit engaged in either homeland defense activity (as defined at 32 U.S.C. § 901) or contingency operations (as defined at 10 U.S.C. § 101). See “Resident Military” above for tax treatment of active duty military compensation of MT residents.

https://www.law.cornell.edu/uscode/text/32/901





A taxpayer who is a survivor of a National Guard member who died while on state active duty orders and received a death benefit payment from the MT Department of Military Affairs may exempt from MT income tax the amount of the payment included in federal AGI. Deduct the death benefit payment on Form 2, MT Subtraction Schedule, line 14.

Reimbursements for group life insurance premiums paid by MT Department of Military Affairs (up to $17.50 a month) or the federal government to Reservists/National Guard servicemembers are considered a bonus and are exempt from MT taxation and may be deducted on Form 2, MT Subtraction Schedule, line 14.




Additional Resources Military Personnel and Spouses – Montana Department of Revenue

https://mtrevenue.gov/taxes/individual-income-tax/military-personnel-spouses/



Nebraska

Filing Status General Rule: Use the same filing status for NE as used on federal income tax return. Married, Split Residency Exception: Spouses who file a joint federal return and do not have the

same state residency status may elect to file a joint or separate NE return. This exception applies when one spouse is a resident or part-year resident and the other spouse is a nonresident.

o Joint Filing: By making this election, both spouses are consenting to be taxed as NE residents during their period of residency in NE. This election is revocable.

o Separate Filing: A married couple with split state residency may benefit by filing separately in NE. The taxpayer will need to recalculate his/her federal return as if filing separately to report separate amounts on the NE return.

Extensions NE follows the federal rules on 180-day extensions for servicemembers serving in a combat zone. Paper filers should print the name of the CZ, terroristic, or military action in bold letters at the top of

page 1 of the return. E-filers should use the same designation as required by the IRS.

Resident Military NE follows federal guidelines exempting combat pay from taxation. No Nebraska adjustment is

needed. Resident servicemembers should check the “Active Military” box on Form 1040N if they were active

military servicemembers at any time during the tax year. This includes Reservists or National Guard members called to active duty.

NE follows federal CZ forgiveness. If a servicemember dies in a CZ or in a terroristic or military action, the following procedures can be used to file a claim for tax forgiveness:

• File Form 1040N with a federal W-2 if the NE individual income tax return has not been filed for the tax year; or

• File 1040XN if the NE return has already been filed. A separate 1040XN must be filed for each year in question.

Paper filers should print the name of the CZ or terroristic or military action in bold letters at the top of page 1 of the return. E-filers should use the same designation as required by IRS.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by NE. A nonresident servicemember’s non-military income remains subject to tax in NE. If filing to report

non-military income, the servicemember will subtract non-taxable active duty military income on Schedule I, line 19. Non-military income can include any civilian employment, such as working at the Post Exchange or officer’s clubs.

MSRRA-qualified spouses who earn wages from employment in Nebraska are not subject to NE tax on those wages.



MSRRA-qualified spouses may submit a completed Form 9N to their employer to prevent NE withholding from exempt income.

Reservist/National Guard Reservist income is only taxable by the Reservist’s state of legal residence. NE allows Reserve and National Guard members to deduct overnight transportation, meals, and

lodging expenses for traveling over 100 miles to attend National Guard or Reserve training. Reservists not serving in a CZ but called to active duty may be eligible for a deferment of payment

on back taxes without interest if their ability to pay has been severely impaired. Members should contact the Department’s taxpayer assistance section at (800) 742-7474 or (402) 471-5729.


Retirement Retiring servicemembers should make a one-time irrevocable election to exclude a portion of

military retirement benefits to the extent included in federal AGI, of either: o 40% for 7 consecutive taxable years beginning with the year in which the election is made; or o 15% for all taxable years beginning with the year in which the servicemember turns 67 years of

age. Retiring servicemembers failing to make the election within 2 years of retiring from the military are

not eligible for the exclusion. Retiring servicemembers make the election by using Form 1040-MIL and claim the exclusion on Schedule I, line 27.


Additional Resources Information Guide – Nebraska Income Tax for U.S. Servicemembers, Their Spouses and Civilians

Working with U.S. Forces.

http://www.revenue.nebraska.gov/info/8-364.pdf



New Hampshire

NH does not tax income other than from interest and dividends. NH does not tax an individual’s W-2 wages.

Filing Status No special provisions

Extensions Servicemembers returning from a hazardous duty area or combat zone have up to 180 days to file

their tax return.

Resident Military Servicemembers with interest and dividends gross income of more than $2,400 annually ($4,800 for

joint filers) must file and pay taxes.

Nonresident Military Nonresident servicemembers are not required to pay any form of income tax in states in which they

are not a legal resident.




Additional Resources New Hampshire FAQ on Interest and Dividend tax

http://revenue.nh.gov/assistance/tax-overview.htm

http://revenue.nh.gov/assistance/tax-overview.htm



New Jersey

Filing Status General Rule: Servicemembers use same filing status as on federal return. Married, Split Residency: If one spouse is a NJ resident and the other is a nonresident, the NJ

resident may file separately unless both spouses agree to file jointly as residents. If both spouses elect to file jointly, their joint income will be taxed as if they were both NJ residents.

Extensions Any servicemember on active duty who cannot file on time because of distance, injury, or

hospitalization resulting from military service will automatically receive a 6-month extension by including an explanation when filing the return.

Servicemembers and civilians providing support to the Armed Forces in a CZ or a qualified hazardous duty area have 180 days after they leave the CZ or hazardous duty area to file their NJ income tax return. Such servicemembers and civilians enclose a statement with their return to explain the reason for the extension. In addition, if the servicemember is hospitalized outside of NJ for injuries received while serving in a CZ or qualified hazardous duty area, the servicemember has 180 days from the time they leave the hospital or the zone/duty area, whichever is later, to file their NJ income tax return.

Resident Military NJ taxes:

• all active duty pay (unless the income is specifically exempt from tax under NJ law), • cost-of-living allowances, and • combat pay (Starting in 2021, NJ will exclude combat pay that is exempt from federal

income tax). NJ exempts mustering-out payments, subsistence and housing allowances from taxation. A servicemember is considered a nonresident for tax purposes and the servicemember’s military pay

is not taxable by NJ if the servicemember is a NJ resident and stationed outside of NJ and: • the servicemember does not have a permanent residence in NJ • the servicemember maintains a permanent residence outside of NJ solely with out-of-

pocket funds and forfeits the basic allowance for housing (BAH). • the servicemember and the servicemember’s spouse if married spent less than 30 days in NJ

during the tax year. NJ forgives tax liability for servicemembers that die as a result of injuries sustained while serving in a

combat zone or qualified hazardous duty area for the year of death and for any earlier years served in the combat zone or qualified hazardous duty area. Neither the deceased servicemember nor the estate of the deceased servicemember file a NJ income tax return for these years.

If the servicemember is an enrolled member of an Indian Nation, tribe or pueblo, such servicemember’s military pay is exempt from NJ withholding tax when the servicemember files Form DD-2058-2. The servicemember must provide the name of the tribe to which s/he belongs along with the name of the reservation or location in Indian Country which is the primary residence



Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by NJ and a

nonresident servicemember is not required to file a NJ income tax return unless the servicemember receives non-military income from NJ sources.

MSRRA-qualified spouses are not subject to tax on wages earned in NJ. All other income earned by the non-military spouse, such as gain from sale of real property located in NJ, remains taxable to NJ.

MSRRA-qualified spouses may file Form NJ-165 with their employers to stop NJ tax withholdings. A nonresident servicemember or spouse must file NJ-1040NR to receive refund of NJ tax withheld or

if they otherwise are subject to a NJ filing requirement.


Tax Credits Servicemembers who rent their NJ home out in their absence are not eligible for the Homestead

Benefit Program. Wounded Warrior Caregivers Credit. Taxpayer or spouse who is providing care for a relative who is a

“qualifying armed services member” should complete Schedule NJ-WWC to calculate the credit. Credit is reported on NJ - 1040, line 62.

Retirement Military pensions and survivor benefit payments are exempt from NJ income tax, regardless of age

or disability status. Such payments should not be reported on the NJ tax return. This exemption does not apply to civil service pensions or annuities, even if the pension or annuity is based on credit for military service.

Veteran’s Exclusion: Resident servicemembers who are honorably discharged from active duty any time before the last day of the tax year are eligible for a $6,000 exemption, claimed on NJ -1040, Line 9. Official documentation showing character service (discharge) is required. A list of acceptable documentation can be found at njtaxation.org


Additional Resources Military Personnel Income Tax Information NJ Dept. of Treasury webpage Military Personnel (Bulletin GIT-7), New Jersey Division of Taxation Tax Topic NJ Tax Talk Line - 1-800-323-4400, enter code:

• 101 – Military Personal Residency Defined & Income Tax Filing Requirements • 102 – Military Personnel Nonresident Defined & Income Tax Filing Requirements • 104 – Military Extensions

http://www.state.nj.us/treasury/taxation/military/taxinformation.shtml

http://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git7.pdf



New Mexico

Filing Status General Rule: Servicemembers use the same filing status as used on federal return. Caution, Community Property State: If the spouse earning the NM sourced income is domiciled in a

community property state, the spouses must equally split the community income. Consequently, both spouses will have NM sourced income and they will not qualify for the nonresident spouse exception to filing status rules.

Extensions NM allows an extension for servicemembers serving in or wounded in a combat zone, which allows

servicemembers 180 days past the last day of qualifying service or continuous hospitalization to file their return. Servicemembers should write “Combat Zone” in red ink across the top of their NM return.

NM extends the filing date to one year after the return of a servicemember to NM if the filing date occurs while the servicemember is on active duty or deployed. Servicemembers claim the extension by writing “Deployment” in red ink across the top of the NM return and by attaching a copy of Form DD 214.

Resident Military Resident servicemembers may deduct active duty military pay that is included in federal AGI on PIT-

ADJ, line 16. Combat pay and allowances are not subject to NM income tax to the extent excluded from federal

AGI. NM does not tax the military pay of an enrolled member of an Indian Nation, tribe, or pueblo if the

servicemember’s permanent residence is on the lands of that Indian Nation, tribe, or pueblo and the servicemember’s state of legal residence has not been changed.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by NM.

Nonresident active duty servicemembers who earned only military income are not required to file a NM return.

Servicemembers who are required to file a NM return to report non-military NM-sourced income should exclude their military income on Form PIT-B, line 1 columns 1 and 2, and on PIT-ADJ line 16.

MSRRA-qualified spouses exclude their income on Form PIT-B, line 1, column 2 and mark the indicator box for military spouse exemption at the top of the form.

MSRRA-qualified spouses should annually file Form RPD-41348, Military Spouse Withholding Tax Exemption Statement, with their employer to claim exemption from NM income tax withholding.



Reservist/National Guard/Adjustments Servicemembers who receive a reimbursement from the servicemember’s life insurance

reimbursement fund can claim an exemption in the amount of that reimbursement on PIT-ADJ, line 19.



Special Filing Rules/Restrictions NM does not forgive the tax liability of a servicemember who dies in a combat zone.

Additional Resources New Mexico Taxation & Revenue FAQs

http://www.tax.newmexico.gov/Individuals/faqs.aspx



New York

Filing Status General Rule: Servicemembers must use the same filing status for NY as used for filing the federal

return. Married, Split Residency: If the servicemember is married and one spouse is a resident and the

other spouse is a nonresident, they must file separate NY income tax returns unless the couple elects to determine their joint NY taxable income as if both were residents (giving up the protections of the SCRA).

Extensions Servicemembers who are stationed in a foreign country when the return is due are entitled to an

automatic 2-month extension to file a NY income tax return. NY assesses interest on any tax owed from the original due date of return to the date of payment.

Servicemembers who served or are currently serving in a CZ or qualified hazardous duty area or are serving in a contingency operation deployed outside the U.S. are allowed an extension of time for filing the NY return and paying tax due for at least 180 days after the later of:

o the last day in a CZ or service in a contingency operation (or the last day the area qualifies as a CZ or the operation qualifies as a contingency operation); or

o the last day of hospitalization inside or outside NY State because of an injury received while serving in a CZ or contingency operation.

In addition, NYS adds any days of the filing period that were left when the servicemember entered the CZ to the 180 days to determine the latest timely filing extension date.

Servicemembers qualifying for an extension of time under the CZ or contingency operation relief provisions enter special condition code C7 in the space provided on the NY return.

Resident Military A NYS resident servicemember’s military pay is subject to NYS tax unless the servicemember meets

other NYS military pay exemptions. A servicemember who was domiciled in NY when s/he entered the military can file as a nonresident

if s/he meets all prongs of either Group A or B as shown below: o Group A Servicemember did not maintain any permanent place of abode in NY State during the tax

year Servicemember maintained a permanent place of abode outside NY State during the

entire tax year Servicemember spent 30 days or less in NY during the tax year (any part of a day is a day

for this purpose)

A servicemember meeting all Group A requirements may claim a refund of NY income tax withheld from military pay by filing Form IT-203 with the Department. The servicemember must include a statement explaining that the servicemember did not have a permanent place of abode in NY during the tax year; the location / brief description of the permanent place the servicemember maintained outside NY state with the beginning and end dates of



the servicemember’s stay there; and the exact number of days the servicemember was in NY during the tax year.

o Group B Servicemember was in a foreign country for at least 450 days during any period of 548

consecutive days Servicemember, spouse (unless legally separated), and minor children spent 90 days or

less in NY State during this 548-day period During the nonresident portion of the tax year in which the 548-day period begins and

ends, the servicemember was present in NY for no more than the number of days which bears the same ratio to 90 as the number of days such portion of the tax year bears to 548. Refer to NY Pub. 361 for an example.

NY will treat a servicemember who meets all the requirements of Group B as a nonresident for the entire 548-day period. However, the servicemember must file NY Form IT-203 for the tax year in which the 548-day period began and may need to file NY Form IT-203 for the year the servicemember returns to NY.

CZ pay is exempt from NYS, NYC, and Yonkers income taxes. Subtract CZ pay on NY IT-225, Schedule B, line 10 using code S-118 for military combat pay.

Servicemembers may qualify to defer the payment of back taxes if called to active duty. Deferments are given to those that can show their ability to pay has been materially impaired. Servicemembers must have received notice of tax due or be on an installment payment agreement before applying for a deferral. To apply, servicemembers should write “Military Duty Deferral Request” on the top of the tax notice, provide a written explanation how military service has created an inability to pay, and send the notice and explanation to the NY Tax Department.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by NY. Nonresident/Part-Year Resident servicemembers use NY IT-203, NR and PY Resident Return. Nonresident servicemembers subtract military pay on NY Form IT-225, NYS Modifications, Schedule

B, line 10 using code S-119 for military pay. Nonresidents enter the total amount of military pay included in the federal amount column on line 1 of Form IT-203. Part-year residents enter the total amount of military pay included in the federal amount column on line 1 of Form IT-203 received during the nonresident period.

MSRRA-qualifying spouses exclude wages on IT-203, line F using code M2. MSRRA-qualifying spouse electing to use the same state of legal residence as military

servicemember enter code M4 in the G box on IT-201.

Reservist/National Guard Members of the NYS organized militia may subtract qualifying pay received for performing active

service within NY under state active duty orders and for pay received for performing active service, other than training, under any federal active duty orders on Form IT-225, Schedule B, line 10 using code S-126. Income received for regular duties in the organized militia does not qualify for this subtraction.



Reservists may qualify to defer the payment of back taxes if called to active duty. NY grants deferments to Reservists that demonstrate their ability to pay back taxes has been materially impaired. Reservists must have received notice of tax due or have an installment payment agreement before applying for a deferral. Reservists apply for the deferral by sending the notice to the Department and printing “Military Duty Deferral Request” at the top of their tax notice along with a written explanation of how military service created an inability for the member to pay the back taxes. If the Reservist has an existing installment payment agreement, the Reservist must call NY Collections and Civil Enforcement Division at (518) 457-5434.


Retirement Military pension payments received by retired military personnel or their beneficiaries are fully

exempt from NYS tax. This exclusion includes veterans’ benefits that are also exempt from federal tax. Exclude qualifying benefits included in federal income on Form IT-201, line 26 or IT-203, line 28.

Special Filing Rules/Restrictions If a servicemember dies while serving in a CZ or because of injuries received while serving in a CZ, NY

does not impose income tax for that year and waives any outstanding tax balances and penalties for tax years prior to deployment. If the deceased servicemember paid any taxes while in the CZ, NY will refund those payments to the estate or surviving spouse. The surviving spouse or the estate claims tax forgiveness by using special condition code K2 in the space provided on the tax return.

Additional Resources Pub.-361, NYS Income Tax Information for Military Personnel and Veterans

https://www.tax.ny.gov/pdf/publications/income/pub361.pdf



North Carolina

Filing Status General Rule: Servicemembers use the same filing status for NC as used on the federal return. Nonresident Spouse Exception: Married couples where one spouse is a resident and the other is a

nonresident who earned no NC income may elect to file jointly or separately in NC.

Extensions NC allows servicemembers stationed outside of the U.S. or Puerto Rico on April 15th an automatic

extension of 4 months for both the filing and payment of income taxes; interest is assessed from the due date of the return until the tax is paid. Servicemembers claim the extension by marking the “Out of Country” indicator on Form D-400, page 1.

Resident Military Resident servicemembers are required to pay NC income tax on military pay and remain subject to

NC tax withholding regardless of where the servicemember is stationed.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by NC. A nonresident servicemember’s non-military pay earned in NC, such income from other

employment, a business, an interest in tangible property in NC, and NC gambling winnings, remain subject to NC tax.

A MSRRA-qualified spouse’s income is not subject to tax in NC. The spouse excludes non-taxable income on Schedule D-400 PN. Qualifying spouses should exclude exempt income from Column B, NC amounts. Qualified spouses are advised not to deduct their income as an “other deduction” on Form D-400 Schedule S.

MSRRA-qualified spouses may file Form NC-4 EZ with their employer to claim an exemption from NC income tax withholding. The spouse must submit Form NC-4 EZ with a certification of his/her state of domicile, a copy of the spousal military identification card, and a copy of the servicemember’s most recent leave and earnings statement. The spouse must file Form NC-4 EZ every year and it remains effective until February 15th of the following year.



Retirement Retirement benefits received by vested government retirees under the Bailey Settlement are

excluded from NC income tax. A retiree entitled to exclude retirement benefits from NC tax claims the deduction on Form D-400, Schedule S, line 21.



Special Filing Rules/Restrictions Form D-400 includes a veteran information section where the servicemember, and their spouse if

filing a joint return, can voluntarily indicate whether they are military veterans. NC will use the information to compile a report about the number of veterans filing tax returns in NC. No information regarding the servicemember’s tax liability will be shared and employee/employer information will remain confidential.

Additional Resources Military FAQs , North Carolina Dept. of Revenue Active Military , North Carolina Dept. of Revenue

http://www.dornc.com/taxes/individual/armedforces/faq_spouses.html

http://www.dornc.com/taxes/individual/military.html



North Dakota

Filing Status General Rule: Servicemembers use the same filing status for ND as used on the federal tax return.

Extensions Taxpayers, including servicemembers, that obtain an extension of time to file the federal return, do

not need to file an extension with ND. Servicemembers serving, or providing direct support to military operations, in a combat zone have

until the federal extended due date to file their ND return and pay any tax due without penalty or interest. The due date is 180 days after the last of service in the combat zone or 180 days after the last of continuous hospitalization (up to 5 years). This extension also applies to Reservists and National Guard members mobilized for federal active duty serving, or providing direct support to military operations, in a combat zone.

Servicemembers not serving in a combat zone and that are: o Stationed outside the boundaries of the U.S., have until the due date (or extended due date) for

filing the federal return to file the ND return. o Stationed in the U.S. and who do not file a federal extension must file by the due date unless

they file for an extension of time to file from ND by completing ND Form 101 by the due date of the return. The servicemember needs to have good cause for the extension and have the extension approved by ND.

Resident Military Servicemembers who are residents of ND serving in the U.S. armed forces are required to file a ND

return and are subject to ND income tax on all income, regardless of where stationed. Resident servicemembers indicate the source of the majority of their income by using income source code “11”, active military service, on Form ND-1 or ND-EZ.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by ND. Nonresident servicemembers are not required to file a ND return unless they have non-military ND

sourced income, or they file a joint federal income tax return with their spouse who is required to file a ND return.

Nonresident servicemembers who are required to file a return are allowed a deduction for active duty compensation in calculating ND taxable income. However, no deduction is allowed for any portion of military compensation that is combat pay. Servicemembers use Form ND-1, line 11 to subtract the qualifying portion of their active duty military pay.

ND’s interpretation of the MSRRA does not require a civilian spouse to have the same home state or domicile as the servicemember to qualify for the protections of the MSRRA.

Nonresident spouses can stop withholding of ND income tax from exempt wages by completing Form NDW-M and giving it to the employer along with a copy of the dependent military ID card. If



ND income tax was already withheld from exempt wages, a refund may be obtained by filing a ND income tax return, Form ND-1, along with Schedule ND-1NR.

Reservist/National Guard Reservists and National Guard members subtract compensation received for federal active duty

service from ND income by completing Form ND-1SA, line 6 and attaching a copy of Title 10 orders to the return to allow the subtraction on Form ND-1, line 16. The subtraction does not include compensation exempted from federal income tax or compensation received for attending annual training, basic military training, or professional military or developmental education.


Retirement For tax years 2019 and after, military retirement benefit payments received by retired U.S. armed

forces, Reserve, and National Guard members, or their surviving spouses, may be subtracted from North Dakota taxable income using Form ND-1, line 14. The deduction is equal to the taxable amount of the benefits reported on the federal income tax return for the tax year.

Special Filing Rules/Restrictions Use ND Form 500 to authorize the disclosure of confidential tax information or to designate a

representative. ND does not accept nor recognize federal Form 2848, Power of Attorney and Declaration of Representative.

Additional Resources Military Service Members Income Tax Guideline Military Service Members Civilian Spouses of Military Service Members Guideline

https://www.nd.gov/tax/data/upfiles/media/form500_1.pdf?20171016093238

https://www.nd.gov/tax/data/upfiles/media/military-service-members-guideline-2019.pdf?20200206150336

https://www.nd.gov/tax/user/individuals/overview/military-service-members/

https://www.nd.gov/tax/data/upfiles/media/civilian-spouses-of-military-service-members.pdf?20200121115222



Ohio

Filing Status General Rule: Use the same filing status for Ohio as used on federal income tax return. Qualifying Widower Exception: Taxpayers using the status "Qualifying widow(er) with dependent

child" on their federal income tax return, mark the "Single, head of household or qualifying widow(er)" box on the Ohio income tax return.

Extensions Ohio allows servicemembers, including Reservists and National Guard members, serving in a CZ an

extension for filing Ohio and school district income tax returns and making payments for Ohio and school district estimated income tax. Ohio allows servicemembers and extension for:

o 180 days beyond their period of service in a CZ; o time in continuous hospitalization outside the U.S.; and o time in hospitalization within the U.S. from injuries received while serving in a CZ (up to 5

years). Servicemembers granted this extension must pay interest with respect to Ohio and school district

income tax return payments made after the fifteenth day of April of each year following the last day of the taxable year. However, Ohio waives all related interest penalties, failure-to-pay penalties, and failure-to-file penalties otherwise due during the suspension period.

Reservists and National Guard members called to active duty may apply for both an extension of time for filing of Ohio income tax and school district income tax return and an extension of time for payment of the related taxes. Ohio allows an extension for both the period of the servicemember’s duty and for a period of sixty days after the end of duty. Servicemembers who qualify for this extension provision must file the application on or before the 60th day after the servicemember’s duty terminates.

Resident Military Resident servicemembers stationed in Ohio are taxed on military pay and allowances received. Active Duty Pay Deduction - Servicemembers may deduct from Ohio income all active duty military

pay earned while stationed outside of Ohio. on Schedule A, line 26, to the extent wages were included in federal AGI.

MIRF Deduction - Servicemembers may deduct payments received from the Military Injury Relief Fund (MIRF) on Schedule A, line 29.

All federal income tax relief provisions for service in a CZ also apply to Ohio taxes. Pay earned while serving in a CZ, including base pay, hostile fire, and imminent danger pay is excluded from federal income tax and from Ohio income and school district income tax. The only exception to this is for commissioned officers, whose CZ pay exclusion is capped at the highest enlisted grade plus hostile fire and imminent danger pay.



Nonresident Military Under SCRA, nonresident servicemembers may deduct their military compensation and all other

non-Ohio sourced income on Sch. A, line 27. A MSRRA qualified spouse deducts Ohio wages on Sch. A, line 27. A MSRRA-qualified spouse may claim a refund of Ohio income tax withheld on MSRRA exempt

wages by filing an Ohio income tax return. The spouse may file Ohio Form IT MIL-SP with his/her payroll provider to avoid future Ohio tax withholding on MSRRA exempt income.

Reservist/National Guard Ohio resident members of the Ohio National Guard and Reserves may deduct military pay received

while stationed outside Ohio, if eligible. Ohio Reservist & National Guard Reimbursements and Benefits - Ohio Reservists and National Guard

members may deduct the following income on Schedule A, line 30 if the amounts were included in federal AGI and not otherwise deducted elsewhere on the Ohio return:

o Reimbursements of group life insurance premiums paid by the Ohio Adjutant General. Member must have purchased group life insurance pursuant to the "Servicemembers' Group Life Insurance Act" and have been on active duty in the Ohio National Guard for the month during which the member paid the premiums.

o Death benefits paid by the Ohio Adjutant General due to the death of an active duty member of the Ohio National Guard.

Reservists and National Guard members are eligible for active duty and combat duty extensions as outlined in the above “Extensions” section.


Retirement Retired servicemembers receiving retirement income related to “uniformed services” may exempt

the income from Ohio tax on Schedule A, line 28. “Uniformed services” includes Army, Navy, Air Force, Marine Corps, Coast Guard, National Guard and Reservists, the commissioned corps of the National Oceanic and Atmospheric Administration, and the Public Health Service.

Ohio Veterans Bonus: Retired resident servicemembers exempt this income from both federal and Ohio tax. Since the income is excluded federally, there is no provision to exclude from Ohio income.

Surviving spouses of servicemembers may exempt pay received through the Survivor Benefit plan.


Additional Resources Income Taxes and the Military, Ohio Dept. of Taxation webpage Individual Income Tax - Military FAQs, Ohio Dept. of Taxation webpage Information Release IT 2002 01 Combat Zone Designation Information Release IT-2008-02 Military Taxpayer Guide

http://www.tax.ohio.gov/ohio_individual/individual/military_tax_provisions.aspx

http://www.tax.ohio.gov/ohio_individual/individual/faqs/military.aspx

http://www.tax.ohio.gov/ohio_individual/individual/information_releases/it200201.aspx

http://www.tax.ohio.gov/ohio_individual/individual/information_releases/it200802.aspx



Oklahoma

Filing Status General Rule: Servicemembers should use the same filing status for their OK returns as they used

for their federal returns Married, Split Residency: If the servicemember is an Oklahoma resident and his/her non-military

spouse is a nonresident, the couple may choose to file: o Married filing separately with the Oklahoma servicemember filing on Form 511 and the

nonresident civilian spouse filing on Form 511NR if the spouse has an Oklahoma filing requirement; or

o Married filing jointly with both spouses claiming Oklahoma residency. A statement should be attached to the return stating the nonresident is filing as a resident for tax purposes only.

Extensions If the servicemember is absent from Oklahoma while on active duty or confinement in a hospital

and filing a timely return is impractical or impossible, the time for filing the tax return and paying an income tax shall be the 15th day of the 3rd month following the month in which the servicemember returns to Oklahoma or is discharged from the hospital.

Resident Military Resident servicemembers may deduct or subtract 100% of their active duty military pay from

income to the extent such pay is included in the servicemember’s federal AGI. • Resident servicemembers may claim the deduction on Schedule 511-C, line 1. • Part-year residents can claim the deduction for the part of the year they were an Oklahoma

resident on Schedule 511NR-C, line 1. • Resident servicemembers who are also enrolled members of a federally recognized Indian

tribe may claim the deduction under exempt tribal income if their home of record is within their tribe’s “Indian Country” and they have not elected to change their legal residence. The servicemember may take the tribal exemption on Schedule 511-A, line 10.

Nonresident Military Nonresident servicemembers exempt active duty military pay from Oklahoma income tax under

SCRA. Military pay entered on Schedule 511NR-1, line 1 in the federal amount column is adjusted on Schedule 511NR-B, line 12.

Non-military income of $1,000 or more earned from Oklahoma sources by a nonresident servicemember is taxable and reported on the 511NR.

MSRRA qualified spouse: A MSRRA qualified spouse’s wages, salaries, and commissions are exempt from Oklahoma income tax. If the couple is required to file an Oklahoma tax return or files an Oklahoma tax return to receive a refund of taxes withheld, the couple claims the exemption by attaching copies of the servicemember’s military W-2, the spouse’s W-2, the Leave and Earnings Statement (LES), and copies of the couple’s federal income tax return and the resident state return to their Oklahoma income tax return.



o A MSRRA qualified spouse may file Form OW-9-MSE and claim exemption from Oklahoma withholding tax.

Reservist/National Guard Reservists and National Guard members may deduct 100% of their active duty pay from income

earned while a resident of Oklahoma the extent such pay is included in their federal AGI. • Resident servicemembers claim the deduction on Schedule 511-C, line 1. • Part-year resident servicemembers may claim the deduction but only as to the military pay

included in Oklahoma source income on Form 511NR-1. Part-year resident servicemembers claim the deduction on Schedule 511NR-C, line 1.

Tax Credits Servicemembers may claim a credit for taxes paid to other states on Form 511TX. Residents, part-year residents, and nonresident servicemembers whose income is below $100,000

and who took either a child care expense or a child tax credit on their federal return also qualify to take a childcare/child tax credit against their Oklahoma tax. The credit is the greater of: o 20% of child care expenses allowed by the IRC, or o 5% of the child tax credit allowed by the IRC.

Retirement Military retirees may deduct the greater of 75% of their retirement benefits or $10,000 from their

Oklahoma income. This amount cannot exceed the portion of retirement that was included in federal AGI. o Resident servicemembers claim this deduction on Schedule 511-A, line 4. o Nonresident and part-year resident servicemembers claim the deduction on Schedule 511NR-

B, line 4, only as to retirement income that is sourced to Oklahoma.

Special Filing Rules/Restrictions Oklahoma exempts from tax any payment by the Dept. of Defense due to the death of a military

servicemember killed in action in a designated combat zone. Resident servicemembers claim the deduction on Schedule 511-A, line 15 using code 3. Nonresident servicemembers claim the deduction on Schedule 511NR-B, line 16 using code 3.

Oklahoma exempts any income earned by a servicemember’s spouse during the taxable year in which the servicemember was killed while serving in a combat zone. The spouse claims the deduction on 511-A, line 15 using code 4 or 511NR-B, line 16 using code 4.

Additional Resources Individual questions for Military, Oklahoma Tax Commission FAQ webpage

https://www.ok.gov/tax/faqs.html#c410



Oregon

Filing Status General Rule: Taxpayers, including servicemembers, must use the same filing status on the Oregon

return as used on the federal return. Married, Split Residency: Spouses with different residency statuses may choose between filing

jointly or separately.

Extensions Oregon allows servicemembers the same CZ or contingency area extension as the federal

government. Servicemembers taking the federal CZ extension should mark the "Extension filed" and "Military" indicators on their Oregon return to receive an Oregon extension.

Resident Military Resident servicemembers stationed in Oregon are taxed on their military pay and income unless

they qualify for an Oregon subtraction. Military pay includes active duty pay, reenlistment bonuses, pay for guard and reserve annual training, weekend drills, and inactive duty training.

Military Pay Subtractions: A resident servicemember may subtract military pay to the extent included in federal AGI from Oregon income on Schedule OR-ASC, Section 2, using code 319, Military Active Duty Pay. Servicemembers may qualify for more than one of the subtractions below: o Stationed outside Oregon — Servicemembers may subtract military pay earned while stationed

outside Oregon. o Guard and Reserve away from home —Reservists and National Guard members may subtract

military pay earned while assigned away from home 21 days or more. See Reservist/National Guard below.

o Other military pay —Servicemembers with any remaining taxable military pay after taking the above subtractions may subtract up to $6,000 of military income.

Resident servicemembers and their spouses who relocate due to a permanent change in duty station may deduct moving expenses.

Residency Exceptions: Servicemembers domiciled in Oregon but stationed outside of the state may qualify for an exception from Oregon residency and are not taxed on military pay in two situations o Special-Case Nonresident: Servicemembers domiciled in Oregon but stationed outside of

Oregon may qualify as “special-case” nonresidents if: They did not have a permanent residence in Oregon for themselves or family during

any part of the tax year. Their permanent residence was outside Oregon during the entire tax year. They spent less than 31 days in Oregon during the tax year.

o DFAS Address Outside of OR: A servicemember may be treated as an Oregon nonresident regardless of where stationed if the servicemember is both performing “active service” other than annual training duty or inactive duty training; and is a resident of another state according to DFAS payroll records.



Nonresident Military Nonresident servicemembers are not taxed on military pay or income under SCRA and do not need

to file an Oregon return unless they earned non-military income from an Oregon source or had Oregon tax withheld from military pay.

Nonresident servicemembers who earn non-military Oregon-sourced income must file an Oregon return and pay Oregon taxes on that income. Examples of Oregon-source income include, but are not limited to, wages from a job held on off-duty hours or earnings from an Oregon business or rental property. A nonresidents’ interest income from an Oregon bank account generally isn’t taxable by Oregon.

Servicemembers with non-military Oregon sourced income or who had Oregon tax withheld from military pay will file Form OR-40-N. Enter military income on line 7 in the federal column only. Report other income taxable to Oregon in the Oregon column. Enter military wage income on Sch. OR-ASC-NP in the federal column and -0- in the Oregon column. Mark the “Military” box on the return.

Reservist/National Guard Guard and Reserve Away from Home: National Guard members and Reservists assigned away

from home for 21 days or longer can subtract their military pay earned during this time by completing Schedule OR-ACS, Section 2 using code 319, Military Active Duty Pay.

Guard members called into active state service may qualify for relief of interest and collection activities on any tax owed prior to active state service. Qualifying guard and reserve members should send a written request of relief to the Oregon DOR within 180 days after their active state service has ended and should include a copy of their orders with the request.

Tax Credits Retirement Income Credit – While not exclusive to military personnel, retired servicemembers age

62 or older at the end of the of the tax year who receive taxable retirement income may qualify for the Oregon retirement income credit reported on Schedule OR-ASC, Section 3 using credit code 811. Retirement income includes payments from federal pensions (including military pensions) that are not already subtracted from Oregon taxable income. Retired servicemembers can claim this credit or the credit for the elderly or the disabled, but not both. Refer to Oregon Publication 17 for more details on qualifications.

Retirement Federal Pension Subtraction - While not exclusive to military personnel, retired servicemembers

may subtract some or all their taxable federal pensions from Oregon income on Schedule OR-ASC, Section 2 using subtraction code 307. This includes benefits paid to the retiree or the beneficiary. This does not include disability payments if the retired servicemember has not attained the minimum retirement age. The subtraction amount is based on the number of months of federal service or points earned for retirement before and after October 1, 1991. Refer to Oregon Publication 17 for more details on qualifications.



Special Filing Rules/Restrictions Servicemembers may qualify for a reduced interest rate on Oregon tax liability incurred while on

active duty and up to 180 days after, if active duty service affected the servicemember’s ability to pay and:

o The tax liability came due while on active duty under Title 10 o Servicemember was on active duty for more than 90 consecutive days o Active duty service occurred on or after 09/11/01 o Servicemember notified DOR within 180 days after active duty service ended

Resident servicemembers have the option to stop Oregon withholding from military pay under the following conditions:

o Servicemember had a right to a refund of all prior year Oregon income tax withheld. o Servicemember expects a refund of all current year Oregon income tax withheld. o Servicemember expects to be stationed outside of Oregon all of the next tax year.

To stop Oregon withholding, servicemembers must file a Form W-4 specifically for Oregon in addition to the federal Form W-4. The servicemember should write "exempt" on line 7 and write "For Oregon Only—Stationed Outside Oregon" at the top. The servicemember should give this form to the appropriate pay clerk.

Additional Resources Military personnel, Oregon Dept. of Revenue webpage Oregon Publication 17 (2020)

http://www.oregon.gov/DOR/programs/individuals/Pages/military.aspx

https://www.oregon.gov/dor/forms/FormsPubs/publication-or-17_101-431_2020.pdf



Pennsylvania

Filing Status General Rule: Taxpayers, including servicemembers, can use a different filing status for PA than

used for the federal income tax return. Married, Split Residency: If one spouse is a PA resident and the other is a nonresident, the couple

files separate PA tax returns. However, the couple can file jointly if both elect to file as PA residents and they meet all other requirements for filing jointly.

Married Filing Joint: Taxpayers, including servicemembers, may file a joint PA income tax return for convenience only and only if they meet all other requirements for filing jointly. If filing a joint return, each spouse is separately liable for the entire amount of PA tax due, even if only one spouse has taxable income, and even if one spouse paid his/her own PA tax through withholding or estimated payments. The income and losses of a taxpayer and spouse must be determined separately.

School District Code: A servicemember should use school district code where his/her spouse is domiciled (if married and if the spouse lives in PA) or the code for the school district in which the servicemember lived while a resident in PA.

Extensions Servicemembers serving in CZ’s or qualified hazardous duty areas receive an automatic 180-day

extension to file the PA income tax return. The 180-day extension period runs from the servicemember’s last day of service or the last day of continuous hospitalization for injuries incurred in one of these areas. To qualify, follow these instructions:

o If filing a paper return, print “COMBAT ZONE” at the top of the return and mail the return and military orders to:

RE: COMBAT ZONE PA DEPARTMENT OF REVENUE, BUREAU OF INDIVIDUAL TAXES PO BOX 280600, HARRISBURG PA 17128-0600

o If filing electronically print “COMBAT ZONE” at the top of the orders and either fax the orders to 717-772-4193 or mail the orders to:

RE: COMBAT ZONE PA DEPARTMENT OF REVENUE, ELECTRONIC FILING SECTION PO BOX 280507, HARRISBURG PA 17128-0507

Resident Military Active duty pay of resident servicemembers is taxable in PA. Servicemembers must report military

pay and non-military pay earned while in PA on PA-40, line 1a Resident servicemembers are exempt from paying PA income tax on active duty military pay earned

while serving full time outside of PA. Although active duty pay is not taxable, servicemembers must complete PA Schedule W-2S, Wage Statement Summary, and submit legible copies of their W-2s and their military orders assigning them to federal active duty outside of PA.



Servicemembers may deduct certain unreimbursed business expenses, including moving expenses incurred to retain employment and/or report to a new location after obtaining employment, using PA-40 Schedule UE, Allowable Employee Business Expenses. Deductible expenses include:

o Expenses incurred in moving the servicemember and his/her immediate family, household goods, and personal belongings

o The cost of transportation to the duty station using actual out-of-pocket expenses or the federal mileage allowance (active duty servicemembers do not have to meet the distance test if their move is a permanent change of duty station)

o Expenses for storing household goods o Expenses for meals and lodging on the way to the new duty station o Parking fees and tolls

In determining a servicemember’s eligibility for PA’s tax forgiveness credit, servicemembers must include all military pay not reported on PA-40 as eligibility income for tax forgiveness using PA Schedule SP. However, hazardous duty zone and CZ pay are not included in determining income eligibility for tax forgiveness.

PA does not tax hazardous duty zone or CZ pay.

Nonresident Military Nonresident servicemembers must include all income not already reported that was earned or

received while residing outside of PA on PA Schedule SP, Section III, Line 6. Nonresident servicemembers serving on active duty in PA in compliance with military orders may

exempt military pay and housing allowances from PA personal income tax under SCRA MSRRA-qualified spouses of nonresident servicemembers may exempt income earned from PA

income tax.

Reservist/National Guard PA reservists and National Guard members ordered to active duty (including active duty for training

pursuant to Title 10 or Title 32 of the U.S. Code) are not taxed on military pay earned while performing active duty outside PA.

PA taxes all income received for inactive duty while attending weekend drills.


Retirement PA does not tax military pension benefits.


Additional Resources Military Pay for PA Personal Income Tax Purposes (Rev-612) MSRRA – Pennsylvania Department of Revenue

https://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/PIT/Documents/rev-612.pdf

https://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/PIT/Documents/rev-612.pdf

https://www.revenue.pa.gov/GeneralTaxInformation/TaxLawPoliciesBulletinsNotices/TaxBulletins/PIT/Documents/pit_bulletin_2010-01.pdf



Rhode Island

Filing Status General Rule: Servicemembers should use the same filing status for RI as used on the federal

income tax return. Married, Split Residency: When one spouse is a resident and the other is a nonresident the couple

must file separate returns unless they elect to file a joint return as if both spouses are residents. If a joint federal return is filed and the resident spouse files separately in RI, the resident spouse must compute income, exemptions, and tax as if a separate federal return had been filed.

Extensions Servicemembers serving in a CZ receive an extension of 180 days from the end of deployment to file

and pay RI taxes.

Resident Military RI income tax is imposed on all the federal taxable income of a resident who is a member of the

armed forces, regardless of where such income is received. RI follows the federal guidelines exempting armed forces pay while serving in a CZ or in an area

under conditions that qualify for hostile fire pay. Servicemembers will not make any adjustments to RI AGI as CZ pay and hostile fire pay is not included in federal AGI.

Nonresident Military Under SCRA, nonresident servicemembers generally will not have a RI filing requirement if all

income is received from active duty military service while stationed in RI. Non-military pay of the servicemember, as well as business income, gambling winnings or income

from the ownership or disposition of real or tangible property earned from RI by either the servicemember or his/her spouse is still subject to Rhode Island income tax.

Nonresident servicemembers who have a RI filing requirement will file a RI 1040NR and subtract active duty military pay on Schedule M, line 1o.

MSRRA-qualified spouses may subtract income for services performed in RI on Schedule M, line 1o.



Retirement While not specific to retired servicemembers, RI exempts to $15,000 of federally taxable pension,

including military retirement pay, from RI income. Exemption is claimed on Schedule M, line 1u. Taxpayers, including retired servicemembers, must meet the following conditions: o Federal AGI includes taxable pension and/or annuity income o Taxpayer reached “full retirement age” as defined by the SSA



o Federal AGI is below $84,700 (S/HOH), $84,700 (MFS), or $105,850 (MFJ/QW)





South Carolina

Filing Status General Rule: Taxpayers, including servicemembers, use the same filing status for SC as used on the

federal income tax return.

Extensions Servicemembers serving in a CZ have the same additional time to file the SC income tax return and

make payments as they have for federal income tax purposes. The due date is automatically extended for 180 days.

Servicemembers who served in a CZ during the filing period should check the box on Form SC 1040 and enter the name of the CZ.

Resident Military SC does not tax combat zone pay, certain fringe benefits like housing allowances, subsistence

allowances, or other items not taxed by the federal government. SC taxes active/basic pay and reenlistment pay. However, National Guard and Reserve members

called to active duty may be able to deduct a portion of their pay (see below).

Nonresident Military Servicemembers earning non-military income in SC must file Form SC 1040 and Schedule NR.

Servicemembers will exclude military income on Schedule NR, columns A and B pursuant to SCRA. MSRRA-qualified spouses should exclude all personal service wages on Schedule NR, column B. All

other income is taxable and should be reported on Form SC 1040, column A and Schedule NR. To qualify for the withholding exemption, MSRRA-qualified spouses must provide the following to their employers:

o A completed SCW-4, annual withholding tax exemption certification, for spouse o An original copy of the servicemember’s latest LES o A current military identification card identifying the employee as a military spouse

Reservist/National Guard National Guard and Reserve pay for customary annual training, weekend drills, and other inactive

duty training is exempt from SC tax. Servicemembers subtract this income on SC-1040 line (n). Under this exclusion, National Guard or Reserve members may excluded pay received for: o Customary annual training period not to exceed 15 days for guard members or 14 days plus

travel time for reserve members o Weekend drills o Other inactive duty training o 15 days of active duty pay received if called to active duty, providing any pay received for

completing annual training is not excluded on the SC return for the tax year Guards or Reservists who deducted expenses related to Guard or Reserve service on the federal

return must add-back these expenses to SC income on SC 1040, line (c).




Retirement Military Retirement Deduction: Retired servicemembers may claim a military retirement deduction

on Form SC-1040, lines (p-4) – (p-6). o Age 65 or older: Retired servicemembers age 65 or older may deduct military retirement

that was included in federal AGI up to $30,000. o Under age of 65: Retired servicemembers under age 65 may deduct military retirement that

was included in federal AGI up to $17,500. Taxpayers under age 65 must have other SC earned income apart from retirement income to qualify.

Individual Retirement Deduction: While not specific to servicemembers, SC provides a retirement deduction of up to $10,000 for qualifying retirement income received by an individual age 65 and over and up to $3,000 for individuals under age 65. Retirees claim the deduction on SC-1040 lines (p-1) - (p-3).

o Qualified retirement income includes income from IRC § 401, 403, 408, & 457 plans and all public employee plans of federal, state, and local governments.

o Qualified retirement income does not include social security, railroad retirement, or disability retirement income because they are not taxed by SC.

o The deduction is reduced by any military retirement deduction claimed on the same return.

o Retired servicemembers filing a joint return calculate the deduction as though filing separately so that each spouse’s deduction is based on the spouse’s own retirement and earned income.

Surviving Spouse Retirement Deduction: A surviving spouse may deduct up to $3,000/$10,000 of qualified retirement income attributable to the deceased spouse based on the age deceased spouse would have reached had s/he lived. The surviving spouse may claim this deduction in addition to his/her individual retirement deduction.

National Guard & Reserves Retirement Deduction: SC does not tax retirement income paid by the U.S. Government for services in the Reserves or National Guard. Form SC 1040, line (v) instructions provide a Military Retirement Exclusion Worksheet to determine the inactive Reserve and National Guard time as a percentage of total military time. The percentage of inactive time is then multiplied by the military retirement income reported on the servicemembers federal return.


Additional Resources South Carolina Dept. of Revenue Ruling #10-5, Federal Military Spouses Residency Relief Act South Carolina Dept. of Revenue Ruling #09-16, National Guard and Reservists Individual Income Tax FAQ > Military, SC Department of Revenue

https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/RR10-5.pdf

https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/RR09-16.pdf

https://dor.sc.gov/tax-index/individual-income/Pages/FAQ.aspx



Tennessee

TN does not impose a traditional income tax. However, TN imposes the Hall Income Tax on individuals and entities receiving interest from bonds and notes and dividends from stock if such income exceeds $1,250 for single filers or $2,500 for married taxpayers filing jointly.

Filing Status No special provisions

Extensions Servicemembers who owe Hall Income Tax have 180 days following the conclusion of their

deployment in a CZ, or 180 days after they are transferred from the CZ, to file and pay tax. When filing, the servicemember must provide proof of the deployment status and the return from deployment.

Resident servicemembers who are declared prisoner of war, as determined by the U.S. Department of Defense, are exempt from paying the Hall Income Tax during the time of capture and imprisonment and for 60 days after release.

Resident Military The Hall Income Tax applies to resident servicemembers.

Nonresident Military Nonresident servicemembers are not required to file a Hall Income Tax Return.





Additional Resources Tax Guide for Military Members and Veterans –- TN Department of Revenue

https://www.tn.gov/content/dam/tn/revenue/documents/taxguides/militaryveterans.pdf



Utah

Filing Status General Rule: Use the same filing status for UT as used on the federal income tax return. Married Split Residency: If one spouse is a full-year Utah resident and the other spouse is a

nonresident, servicemembers may elect to file separate Utah returns following the instructions in Pub 57, Military Personnel Instructions.

Married Part Year Residency: If either spouse is a part-year resident, the couple must file using the same filing status used on the federal return.

Extensions Utah follows federal guidelines allowing a 180-day extension for servicemembers serving in a

combat zone or overseas contingency operation. Servicemembers serving in a CZ or overseas contingency operation should contact the Utah Tax

Commission at [email protected]. The servicemember, spouse, or representative must include the servicemember’s name, stateside address, date of birth, and date of deployment.

Resident Military Utah treats military pay and allowances of a resident servicemember the same as the IRS. Therefore,

income included in federal AGI is automatically included in Utah income. The active duty military wages of a Native American Utah resident are exempt from Utah tax if the

service member joined the military while living on their tribe’s reservation. Claim this income as a subtraction from income on TC-40, Sch. A, Part 2, using code 77.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military service pay is not taxable on the

Utah return. Nonresident servicemembers without Utah source income are not required to file a Utah return.

Non-military income earned while in Utah remain taxable to the state and the servicemember will have a Utah filing requirement.

Nonresident servicemembers who have a Utah filing requirement will subtract active duty military pay included in AGI on Form TC-40A, Part 2 using code 82 and carry the total to line 8 of the TC-40 return. Taxpayers must also complete Form TC-40B, Non and Part-Year Resident Schedule. The nonresident military income is included in the TC-40B total column (Col. B) on line 1 and subtracted in the TC-40B total column on line 31. Do not report nonresident active duty military pay included in federal income in the Utah portion (Col. A) of income on line 1.

MSRRA-qualified spouses subtract their total income included in federal AGI on Form TC-40A, Part 2 using code 88. The income is included on TC-40B, column B, line 31. MSRRA spouses include their Utah portion of income on TC 40B (Col. A), lines 1 through 15 as appropriate and subtract only the Utah income of the nonresident on TC-40B, column A, line 31.

https://tax.utah.gov/forms/pubs/pub-57.pdf

mailto:[email protected]

http://tax.utah.gov/forms/current/tc-40b.pdf




Tax Credits Military Survivor Benefits Credit – A surviving spouse or dependent child of deceased

servicemember may claim a credit of 5% of the survivor benefits received. Survivor benefits are benefits paid due to death while on active duty or service-connected cause while performing inactive duty. Use Form TC-40A Part 4, Code AA and carry to TC-40, Line 26.

Combat Related Death Credit - A servicemember who dies as a result of military service in a combat zone may claim a nonrefundable tax credit on the servicemember’s return for 100% of the servicemember’s tax liability. For the best method to file for the credit, see Utah Publication 57. To qualify for the credit, the following conditions must be met: o The servicemember must have been in an active duty or reserve component of the United

States Army, Navy, Air Force, Marine Corps, or Coast Guard; and o The death must have occurred while the servicemember was serving in a combat zone, or be the

result of a wound, disease, or injury incurred while serving in the combat zone.



Additional Resources Tax Information for Military Personnel - Utah State Tax Commission Publication 57, Military Personnel Instructions

http://tax.utah.gov/individuals/military-personnel

https://tax.utah.gov/forms/pubs/pub-57.pdf



Vermont

Filing Status General Rule: VT taxpayers, including servicemembers, use the same filing status for VT as used on

the federal return income tax return except in the following two situations where federal information may be recomputed for VT purposes:

o Civil Union Exception: Same sex couples holding a valid civil union certificate may use the “civil union” filing stats on the VT return. This filing status requires recomputed federal income tax information.

o Nonresident Spouse Exception: A VT taxpayer with a nonresident spouse who has no VT income may file separately but will need to recompute federal income tax information. If the taxpayers file the VT income tax return as married jointly, they cannot use VT Schedule IN-113, Part I, to apportion income of the nonresident spouse. See TB-55 for additional information.

Extensions VT follows the federal rules and allows servicemembers an extension of at least 180 days after the

last day of qualifying CZ service or the last day of any continuous qualified hospitalization for injury received from service in the CZ to file an income tax return and pay taxes. Eligible servicemembers write “ACTIVE DUTY COMBAT ZONE” in large letters at the top of the tax return and provide the date of deployment and date CZ service ended or hospital discharge occurred.

VT allows exemptions, extensions, and abatements to qualifying servicemembers and requests that servicemembers contact them for more information.

Resident Military VT exempts the following military pay of resident servicemembers on Schedule IN-113, Part II, line

32: o Wages earned from the armed services for full-time active duty service outside of VT.

Servicemembers may be asked to provide a copy of their active duty orders. o Student loan repayment to the extent included in the servicemember’s AGI.

Servicemembers may be asked to provide supporting documents such as a certification statement from the Armed Services showing the servicemember’s name, address, social security number, amount of student loan repayment, and payment date.

Part-year resident servicemembers use Schedule IN-113, Part I to determine the VT portion of income before applying the above exemptions.

Resident servicemembers who are stationed in VT may be eligible for the Property Tax Adjustment or Renter Rebate.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military service pay is not taxable by VT. Servicemembers use Schedule IN-113, Part I to report any non-military income subject to VT tax and

Part II to exclude the portion of exempt military pay included in federal AGI.

http://tax.vermont.gov/help-and-resources/contact



Reservist/National Guard Servicemembers may exempt up to $2,000 for National Guard or Reserve training pay earned in VT

if the Reservist’s or National Guard member’s AGI for the tax year is less than $50,000. Servicemembers may be asked to provide a copy of the DFAS form or certification statement from their unit verifying that all training was completed during the calendar year. These servicemembers should use Schedule IN-113, Part II, line 32 to subtract the applicable pay from income.




Additional Resources Tax Guidance for Military Servicemembers - Vermont webpage Property Tax Exemption for Disabled Veterans and Their Survivors - Office of Veteran’s Affairs TB-55, Exceptions to Requirement that Vermont Filing Status Mirrors Federal Filing Status

http://tax.vermont.gov/individuals/income-tax-returns/who-needs-to-file/military-personnel

https://veterans.vermont.gov/sites/ova/files/Property%20Tax%20APPLICATION%20fillable.pdf

https://tax.vermont.gov/sites/tax/files/documents/TB55.pdf



Virginia

Filing Status General Rule: Servicemembers should use the same filing status for VA as they used on the federal

income tax return. Married Split Residency: A servicemember and spouse cannot use MFJ filing status if one spouse is

a resident and the other is a nonresident unless both elect to determine their joint VA taxable income as if they were both residents. If the servicemember and spouse wish to preserve the benefits of the SCRA and MSRRA, they should file MFS with the resident filing a resident return and the nonresident spouse filing a nonresident return if they meet the VA income filing threshold.

Extensions Servicemembers stationed outside the U.S. receive an additional 90 days following the completion

of their deployment to file the VA tax return. Servicemembers claim the extension by marking the “overseas on due date” indicator on Form 760.

Servicemembers serving in a CZ receive the same filing and payment extensions as those granted by the IRS plus an additional 15 days, or a one-year extension, whichever date is later. Servicemembers claiming this extension write, “Combat Zone” at the top of the VA tax return, on the envelope, and on any correspondence when responding to notices issued by the VA Department of Taxation.

All extensions also apply to spouses of servicemembers.

Resident Military VA taxes military pay and allowances to the extent they are included in federal AGI and not

subtracted or deducted elsewhere on the VA return. Servicemembers may deduct the following income from VA tax on Schedule ADJ lines 6b-6d:

o Combat Zone Pay: Code 30 - VA does not tax military compensation earned while serving in a combat zone or qualified hazardous duty area.

o Military Basic Pay: Code 38 - Servicemembers who are on extended active duty for periods of more than 90 consecutive days may deduct up to $15,000 of basic military pay from VA taxable income. If basic military pay is over $15,000, then VA reduces the deduction by $1.00 for every $1.00 of income over $15,000. If basic military pay is $30,000 or more, servicemembers are not entitled to the subtraction.

o Death Gratuity Payments: Code 49 - VA exempts military death gratuity payments to the extent such payments were included in federal AGI from VA tax. Survivors may claim a subtraction for military death payments made after September 11, 2001.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military service pay is not taxable by VA. Nonresident servicemembers must report all non-military income from VA sources and pay VA taxes

on such income using Form 763, Nonresident Income Tax Return. MSRRA-qualified spouses may file Form VA-4 with their employer to claim exemption from VA

income tax withholdings



Reservist/National Guard National Guard Subtraction: Code 28 - National Guard servicemembers ranking 03 (Captain) and

below can subtract up to $3,000 in wages or salaries received for active and inactive service in the National Guard of the Commonwealth to the extent included in federal AGI. Subtract qualifying wages on Schedule ADJ, lines 6b-6d using code 28.

Military Basic Pay Exemption: National Guard servicemembers who have been active duty for 90 consecutive days or more during the taxable year may also qualify for an exemption for the first $15,000 of basic military pay.

Restrictions: Servicemembers may not claim both the National Guard subtraction and the military basic pay exemption on the same income.

Tax Credits If a servicemember, the servicemember’s spouse, or a dependent claim either the basic military pay

exemption or the National Guard subtraction, s/he cannot claim a Credit for Low Income Individuals or VA Earned Income Credit.

Retirement Congressional Medal of Honor recipients may subtract the amount of their military retirement

income from Virginia income on Schedule ADJ, lines 6b-6d using code 44.


Additional Resources Important Tax Information Regarding Spouses of US Military Servicemembers (Bulletin 10-1) Important Tax Information Regarding Spouses of US Military Servicemembers (Bulletin 09-10) VA Subtractions from Income

http://www.tax.virginia.gov/laws-rules-decisions/tax-bulletins/10-1

http://www.tax.virginia.gov/laws-rules-decisions/tax-bulletins/09-10

https://www.tax.virginia.gov/subtractions



West Virginia

Filing Status General Rule: Use the same filing status as used on federal income tax return. Married exception: Servicemembers and all other taxpayers that file a joint federal return may

elect to file the WV return as either “Married Filing Jointly” using Rate Schedule I or as “Married Filing Separately” using Rate Schedule II.

o When joint federal but separate state returns are filed, each spouse must report his/her federal AGI separately.

o If one spouse is a WV resident and the other spouse is a nonresident for the entire taxable year a joint WV return may be filed. However, the total income earned by each spouse, regardless of where earned is taxable in WV and no credit is allowed for income taxes paid to the other state.

Nonresident and Part Year Resident Spouse Exception: A joint return may not be filed if one spouse changes residence during the taxable year, while the other spouse maintained status as a resident or nonresident during the entire taxable year.

Extensions WV grants servicemembers an automatic filing extension if a federal extension was granted.

Servicemembers claim the extension by noting on the WV return that a federal extension was granted.

Resident Military Resident servicemembers assigned to duty outside WV report all income to WV and are taxed by

WV as residents if the servicemember maintains a physical presence in WV for more than 30 days during the taxable year.

Active Military Separation: Servicemembers who were on active duty for at least 30 continuous days and have separated from active military service may exclude active duty military pay, but only to the extent the active duty military pay is included in federal AGI for the taxable year in which it is received. Subtract this income on Schedule M, line 35. Include a copy of military orders, discharge papers (DD-214), and W-2(s) with the WV return. This subtraction applies to all active duty branches of the U.S. armed forces, National Guard, and Reserves.

WV does not tax combat pay.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military service pay is not taxable by WV. Nonresident servicemembers must report and pay tax on all non-military income earned from WV

sources. Nonresident servicemembers use WV IT-140, Schedule A to allocate WV and federal income.

MSRRA qualified spouses may claim refunds of withholding for the taxable year by writing “nonresident military spouse” on their IT-140 above the title on the first page. The qualified spouse should indicate the amount of their wages include in their federal AGI on the Schedule M, line 34 as



a decreasing modification. The spouse must include a copy of their State of Legal Residence Certificate, Form DD2068, with his/her return when filing.

Reservist/National Guard WV does not tax military income received by Reserve or National Guard members who are called to

duty pursuant to an Executive Order of the President if the servicemember is serving in Operation Enduring Freedom or are engaged in domestic security duty. Subtract this income on Schedule M, line 34. Servicemembers must include a copy of military orders with the return.

Active Military Separation: Reserve and National Guard members who were on active duty for at least 30 continuous days and have separated from active military service may exclude active duty military pay, but only to the extent the active duty military pay is included in federal. Subtract this income on Schedule M, line 35. Include a copy of military orders, discharge papers (DD-214), and W-2(s) with the WV return.

Military Retirement Exclusion: See Retirement section below for retirement tax breaks available to retired Reserves and National Guard members.


Retirement Military Retirement Exclusion: Federally taxed military retirement income, including survivorship

annuities, received from DFAS by retired servicemembers of the U.S. armed forces, Reserves, and National Guard are exempt from WV tax. Subtract this income on Schedule M, line 30. Include Form 1099-R with the return even if no withholding is reported.


Additional Resources Pub. TSD-430, Income Tax Information for Spouses of United States Military Servicemembers

https://tax.wv.gov/Documents/TSD/tsd430.pdf



Wisconsin

Filing Status General Rule: WI taxpayers, including servicemembers, can use the same filing status for WI as used

on the federal return income tax return or change their filing status for WI purposes. However, married taxpayers filing separate WI returns may not claim the married couple credit, the earned income credit, or the disability income exclusion. Most married couples will pay less tax if they file a joint return.

Extensions WI follows the federal extension rules and allows servicemembers serving in a CZ an interest and

penalty free extension of 180 days after the last day the servicemember served in a CZ or the last day of any continuous qualified hospitalization for injury from service in the CZ.

WI does not charge interest during an extension period for servicemembers serving in support of Operation Freedom’s Sentinel in the United States.

To claim either extension, servicemembers should enter the appropriate code in the “special conditions” section to the right of the filing status on Form 1 or Form 1A as follows:

o Use code 02 for a CZ extension o Use code 01 for an extension due to service in support of Operation Freedom’s Sentinel.

Resident Military WI resident servicemembers serving are subject to Wisconsin income tax on all income earned

during the year, including military pay, even if earned outside WI or overseas, unless excluded by a specific WI credit or deduction.

WI does not tax combat pay. Since combat pay is not taxed on the federal return, no adjustment is required on the WI return.

Combat Zone-Related Death Exclusion: WI allows a subtraction of all military income received by a servicemember who dies in active service while in a CZ or from wounds, disease, or injury incurred while in a CZ. Attach Form DD Form 1300, Report of Casualty, to the return. Claim the subtraction on Form 1, line 11 using code 29. Note that CZ does not include the Sinai Peninsula of Egypt.

Armed Forces Member Credit: See credit section below.

Nonresident Military Under SCRA, a nonresident servicemember’s active duty military pay is not taxable by WI. Nonresident servicemembers must pay WI tax on non-military income, such as from a second job,

side business, or gambling winnings, from WI sources by filing WI Form 1NPR if net income from WI sources is $2,000 or more.

MSRRA-qualified spouses are not liable for WI income tax on income from personal services, such as wage income, but like a nonresident servicemember, may be liability for WI tax on WI-source income from other sources, such as gambling winnings MSRRA-qualified spouses may file Form W-221, Nonresident Military Spouse Withholding Exemption, to avoid WI income tax withholdings on wages.



Reservist/National Guard Reserve & National Guard Deduction: Reserve and National Guard members may subtract any

military pay received from the federal government after being called into active federal service or into special state service authorized by the Department of Defense. The deduction does not apply to pay that members receive for weekend or 2-week annual training. It also does not apply to a servicemember who is serving on active duty or full-time duty in the active guard reserve (AGR) program. Claim the subtraction on Form 1, line 11 using code 20.

Tax Credits Armed Forces Member Credit: Resident servicemembers on active duty that receive military pay

from the federal government for services performed while stationed outside the U.S. may claim a credit up to $300 for this service. Claim the credit on Form 1, line 21.

o Married servicemembers filing jointly may claim a total of $300 for each spouse if both spouses qualify for the credit.

o Nonresidents and part-year residents are not eligible for the credit. o Reservists and National Guard members on active duty who exclude military pay included

on a W-2 (see Reservist/National Guard above) cannot also claim the Armed Forces Member Credit for the same income

Veterans and Surviving Spouses Property Tax Credit: An eligible veteran or an eligible unremarried surviving spouse may claim the veterans and surviving spouses property tax credit. The credit is equal to the property taxes paid by the claimant during the year on the claimant’s principal dwelling in Wisconsin. The credit requires certification from the WI Department of Veterans Affairs. Veterans and surviving spouses claiming the property tax credit cannot also take the homestead credit, the farmland preservation credit, or the school property tax credit.

o An eligible veteran is one who: • Served on active duty under honorable conditions in the U.S. armed forces or in forces

incorporated in the U.S. armed forces; • Was a resident of WI at the time of entry into such active service or who had been a

resident of WI for any consecutive 5-year period after entry into active duty service; • Is currently a resident of WI for purposes of receiving VA benefits under WI law; and • Has a service-connected disability rating of 100% either under 38 U.S.C. §§ 1114 or

1134 or a 100% disability based on individual unemployability. o An eligible surviving spouse must be certified by the WI Dept. of Veterans Affairs and be a

spouse of an individual who: • Served on active duty in the U.S. armed forces or in forces incorporated as part of the

U.S. armed forces or in the National Guard or a reserve component of the U.S. armed forces, and

• Was a resident of WI at the time of entry into active service. o The property tax credit is equal to real and personal property taxes paid on the veteran or

surviving spouse’s WI principal residence. The credit will be limited if the property is more than 1-acre or is sold during the taxable year.



Retirement Military and Uniformed Services Retirement Benefits: Retired servicemembers may exempt

military and uniformed services retirement income by subtracting the amount received to the extent included in federal income on Form 1, line 11 using code 04, Military and Uniformed Services Retirement Benefits. Qualifying income includes income received from:

o The U.S. military retirement system including payments from the Retired Serviceman’s Family Protection Plan or the Survivor Benefit Plan, and

o The U.S. government that relate to service with the Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, or the commissioned corps of the Public Health Service.

Special Filing Rules/Restrictions Servicemembers cannot use Form W1-Z if they are excluding military pay from WI income.

Additional Resources Military and Veteran’s Webpage Fact Sheet 1118, Tax Information for Active Military Personnel Nonresident Military Spouse Withholding exemption

https://www.revenue.wi.gov/Pages/Individuals/military.aspx

https://www.revenue.wi.gov/taxpro/fact/military.pdf

https://www.revenue.wi.gov/Pages/FAQS/ise-nrmilspwhex.aspx



Appendix

Acronyms

AGI Adjusted Gross Income CZ Combat Zone MSRRA Military Spouse Residency Relief Act of 2009, as amended PCOS or PCS Permanent Change of Station QHDA Qualified Hazardous Duty Area SCRA Servicemembers Civil Relief Act TDY Temporary Duty Assignment VBTA The Veterans Benefits and Transitions Act of 2018