State Tax Filing Info for Military Spouses

State Taxes for Working Military Spouses

For military families, filing state taxes becomes complex as you move between duty stations. The following Q&A is designed to help you navigate some of the most frequently asked questions regarding state taxes. 

I’m a military spouse earning income. How do I file my state income taxes?  

State taxes are challenging because the tax laws in each state are different. In most cases, you should file taxes in the state where you are earning income, but there could be an exception for members of the military and their spouses. You’ll want to check the tax laws for the state where you earn income (if it is different than your home of record). This should help you determine your state tax filing requirement. You can find an overview of tax laws by state here.

You can file both your federal and state taxes online using TaxSlayer. Learn how military can file free.

How do I know if I need to file a state income tax return?

One reliable way to get updated information is to consult your state’s Department of Revenue website. You should be able to find information about whether you need to file, plus tax forms, rates, and any credits or deductions that are specific to that state. Many states even have specific Q&A sections for military service members filing income taxes. The TaxSlayer knowledgebase is also a great resource for understanding how to file your state taxes.

What is State of Legal Residency?

Also known as your “home of record,” this is the state where your spouse will report and pay income taxes. It is frequently the place your spouse was living when they joined the service. Because you tend to move from duty station to duty station, it’s important to know your spouse’s State of Legal Residency (SLR) for filing purposes.  

Should I file state taxes in the same state as my spouse?

The Military Spouse Residency Relief Act (MSRRA) allows you to claim your spouse’s state of legal residence as your own for tax purposes. You must simply be able to prove that you have lived there, too. Proof of residence could include voter registration, driver’s license, property tax receipt, or vehicle registration.

If you have never lived in their resident state, you will need to file a separate return in the state where you are living earning income.  

Say you live in Missouri, but you can claim Georgia as your home of record. In this case, you would file and pay taxes on your income to the state of Georgia. According to Missouri’s tax laws, you would also need to file a MO tax return, but your income would not be taxed by Missouri. You would specify that you are a military non-resident on your Missouri state return. 

We lived in two different states this year. I earned income in both. Where should I file state taxes?

You will most likely need to file a state tax return for both states where you earned income. Remember: if you had money withheld from your paychecks and you are expecting a tax refund from the state, you will need to file a return to get your refund.  

My spouse works a non-military job in our current state. Do we have to file state taxes?

Your spouse already reports military pay to their state of legal residence. But if they earn income from a civilian or non-military job, they will need to report those wages as a non-resident in the state where you are currently living. In this case, they may get a tax credit from their state of residence for what they paid in taxes as a non-resident. Learn more.

I work remotely for an out-of-state employer. Do I pay state taxes where I live or where the company is based?

Typically, when you work remotely and your employer is located in a different state, you’ll be expected to file and pay as a nonresident for the state where your company is based. You’ll also file state taxes in your state of domicile or the state where you are currently living (depending on whether you qualify for MSRRA).

Note that if you work as an independent consultant, you should only pay taxes in your resident state – not where the parent company is located. 

 The information in this article is up to date for tax year 2021 (returns filed in 2022).

 

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