Connecticut Military Filing Information
Military Personnel Filing Requirements
Military personnel and their spouses who claim Connecticut as a residence but are stationed elsewhere are subject to Connecticut income tax. If you enlisted in the service as a Connecticut resident and have not established a new domicile (permanent legal residence) elsewhere, you are required to file a resident income tax return unless you meet all of the conditions in Group A or Group B for being treated as a nonresident.
- You did not maintain a permanent place of abode in Connecticut for the entire 2016 taxable year;
- You maintained a permanent place of abode outside of Connecticut for the entire 2016 taxable year; and
- You spent not more than 30 days in the aggregate in Connecticut during the 2016 taxable year
- You were in a foreign country for at least 450 days during any period of 548 consecutive days;
- During this period of 548 consecutive days, you did not spend more than 90 days in Connecticut and you did not
maintain a permanent place of abode in Connecticut at which your spouse (unless legally separated) or minor children spent more than 90 days; and
- During the nonresident portion of the taxable year in which the 548-day period begins, and during the nonresident portion of the taxable year in which the
548-day period ends, you were present in Connecticut for no more than the number of days that bears the same ratio to 90 as the number of days in the portion of the taxable year bears to 548.
If your permanent home (domicile) was outside Connecticut when you entered the military, you do not become a Connecticut resident because you are stationed and live in Connecticut. As a nonresident, your military pay is not subject to Connecticut income tax. However, income you receive from Connecticut sources while you are a nonresident may be subject to Connecticut income tax. See the instructions for a Connecticut nonresident contained in the instruction booklet for Form CT-1040NR/PY.
Example: Jill is a resident of Florida. She enlisted in the Navy in Florida and was stationed in Groton, Connecticut. She earned $38,000 in military pay.
If Jill had no other income . . .
Since Jill resided and enlisted in Florida, she is considered a resident of Florida and does not have to file a Connecticut return. Military personnel are residents of the state in which they resided when they enlisted.
If Jill had a part-time job in Connecticut . . .
Her Connecticut-sourced income from nonmilitary employment is taxable. Jill must file Form CT-1040NR/PY to report the income.
The income tax return of any individual in the U.S. Armed Forces serving in a combat zone or injured and hospitalized while serving in a combat zone is due 180 days after returning. There will be no penalty or interest charged. For any individual who dies while on active duty in a combat zone or as a result of injuries received in a combat zone, no income tax or return is due for the year of death or for any prior taxable year ending on or after the first day serving in a combat zone. 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. In filing the return on behalf of the decedent, the legal representative or the surviving spouse should enter zero tax due and attach a statement to the return along with a copy of the death certificate.
Combat zone is an area designated by the President of the United States as a combat zone by executive order. A combat zone also includes an area designated by the federal government as a qualified hazardous duty area.
Members of the U.S. Armed Forces serving in military operations in the Kosovo, Afghanistan, or Arabian Peninsula regions are eligible for the 180-day extension allowed to individuals serving in a combat zone. Spouses of military personnel and civilians supporting the military in these regions who are away from their permanent duty stations, but are not within the designated combat zone, are also eligible for the extension. Individuals requesting an extension under combat zone provisions should print both the name of the combat zone and the operation they served with at the top of their Connecticut tax return. This is the same combat zone or operation name provided on their federal income tax return.
For additional information, please see the CT state instructions.
Military Spouses: The Military Spouses Residency Relief Act, Pub. L. No. 111-97 (MSRRA), states that if the servicemember and the military spouse have the same state of domicile, then the military spouse will not be considered to have lost or acquired a residence or domicile in any state for purposes of income tax solely by reason of being absent from or present in that state to be with the servicemember serving in compliance with military orders.
Servicemember who is a Connecticut domiciliary: If the servicemember’s domicile is in Connecticut, the military spouse does not qualify for exemption
from Connecticut income tax under the MSRRA. Servicemember who is not a Connecticut domiciliary: For Connecticut income tax purposes, a military spouse is considered a nonresident of Connecticut if the servicemember and the military spouse have the same domicile outside of Connecticut and the military spouse is in Connecticut solely to be with the servicemember who is serving in compliance with military orders.
Income exempt from Connecticut income tax: Generally, income received by a nonresident is subject to Connecticut income tax if the income is
Connecticut-sourced income. However, under the MSRRA, the income received by a military spouse for services performed in Connecticut is not considered Connecticut-sourced income if the following requirements are met:
1. The military spouse and the servicemember have the same state of domicile other than Connecticut;
2. The military spouse is in Connecticut solely to be with the servicemember; and
3. The servicemember is in Connecticut serving in compliance with military orders.
Provided the requirements above are met Connecticut-sourced income eligible for the MSRRA exemption is limited to:
1. Wages, salaries, and other compensation for services performed in Connecticut by the military spouse as an employee; and
2. Small business earnings if the military spouse is the sole proprietor, or the single member of a limited liability company (LLC) treated as a disregarded entity for federal income tax purposes, carrying on business in Connecticut and the income is included in net earnings from self-employment for federal income tax purposes.
3. The MSRRA exemption does not apply to pass-through entity income (including S corporation with a sole shareholder), real estate rental income, and royalties. Other income such as interest and dividends are not taxable to an MSRRA qualifying taxpayer to the same extent the income would not be taxable to any other nonresident.
4. The MSRRA exemption only applies to the military spouse. It does not apply to nonmilitary income earned in Connecticut by the servicemember.
5. Servicemember and spouse with different state of domicile: If the servicemember and the military spouse have different domiciles, the military spouse has a permanent place of abode in Connecticut, and spends more than 183 days in the state in the taxable year, he or she is a resident for Connecticut income tax purposes and must file Form CT-1040,Connecticut Resident Income Tax Return, or electronically file a Connecticut income tax return.
Refund of withholding:
A military spouse who had Connecticut income tax withheld from his or her wages may file a claim for refund of any amount withheld from wages if the spouse qualifies to claim exemption from Connecticut income tax under the MSRRA. The military spouse must file a paper Form CT-1040NR/PY , Connecticut Nonresident and Part- Year Resident Income Tax Return, write “Military Spouse” across the top of the return and attach the following documents:
• A letter signed by the military spouse stating that he or she is claiming the MSRRA exemption on the wages earned in Connecticut and that he or she meets all the requirements to claim the exemption under the MSRRA;
• A copy of the servicemember’s Leave and Earnings Statement;
• A copy of the military ID issued to the military spouse.
Military spouses claiming exemption from Connecticut income tax under the MSRRA may be required to provide proof that he or she qualifies for the exemption.
For additional information regarding the MSRRA, please see CT Informational Publication 2012(15)