When you’re on the move, it can be hard to know where to file your state income taxes. Thankfully, active-duty service members and their spouses have certain protections under the Servicemembers Civil Relief Act, including protections about where you claim residency for purposes of taxes and voting. There are rules for military service members and slightly different rules for military spouses.
Active-duty service members and state taxes
Active-duty service members file state income taxes in their state of legal residence. Military service members are not required to change their legal residence when they move to a new state solely due to military orders; they may maintain their legal residence in a state where they have previously established it.
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Your state of legal residence is the place where you claim to maintain a permanent legal residence, as demonstrated by a wide variety of factors including:
- Maintaining voter registration and voting
- Filing and paying state income taxes
- Maintaining a driver’s license
- Registering vehicles and other indicators of intent
Your legal residence as shown by those factors should be the same place as your legal residence indicated on your Leave and Earnings Statement.
SCRA rules for state income taxes apply only to the service member’s military income. Income from other sources, including second jobs or rental property, is not covered by the SCRA protections and need to be reported to the state in which it was earned.
Military spouses and state taxes
Military spouses may elect to use their active-duty service member’s state of legal residence for purposes of taxation, as long as the military spouse’s current location is due to their service member’s military orders.
Military families with non-typical situations are not always covered by these protections, and the military spouse may need to file in the state where they are physically residing.
Military children and state taxes
The provisions of SCRA do not apply to military children. If required to file state income taxes, they should file in the location where they physically reside.
Do you have questions about your federal or state income taxes? Contact a Military OneSource MilTax consultant for free at 800-342-9647. OCONUS/International? Click here for calling options. Or live chat to schedule a free consultation with a MilTax consultant or a financial counselor.