California Military Filing Information
Should I file a Resident or Nonresident Return?
Military personnel (Army, Navy, Marine, Air Force, Merchant Marine, and Coast Guard) who were residents of California upon entering military service remain residents of California for income tax purposes. Regardless of the period of absence or where you are stationed, if you were a resident of California when you entered the military, you generally remain a resident of California for tax purposes. In most cases, you do not change your state of residency if the only reason you are no longer residing there is because of military orders.
Nonresidents of California: Nonresident military personnel merely having a duty station within California (whose legal residence is not California) are not required to file a California income tax return unless they have earned income from California sources other than military pay (example: you had a part-time job while you were living in California on military orders). If they have earned income in California other than military pay, they are required to file a nonresident return.
Military Couples: A spouse who is not in the military generally has the same domicile as the military spouse unless proven otherwise. Because of this, if you are filing Married Filing Jointly, you would file a Resident return for the state that the military member is a resident of. If the member of the military is a California resident, you would generally file a California Resident Married Filing Joint return. If the member of the military is a nonresident of California you would generally file an California Nonresident Married Filing Joint return.
If you are filing Married Filing Separate returns, the military member would file a Married Filing Separate return for his or her resident state.
If the husband and wife are both in military service, each could be a resident of a different state under the Soldiers’ and Sailors’ Civil Relief Act. You would need to contact your respective states to determine how to file.
Is my military income taxable?
Depending on your particular case, your income may or may not be taxable.
In general, California taxes all of the income you receive while you are a resident of California and all of the income you receive from California sources while you are a nonresident.
Under the federal SCRA, military service members who are not domiciled in California are not taxed by California on pay received for military services performed in California, even though they were stationed in California for the entire year. However, all other income of nonresident military service members from California sources is subject to California tax.
Military retirement pay is taxable by California if it is received by a California resident. This applies to all military pension income received while the retiree is a California resident regardless of where the retiree was stationed or domiciled while on active duty.
How to report in TaxSlayer:
If you determine that you can exclude your military pay from your return, you can do so by selecting State Section from the My Account screen followed by Edit>>>Enter Myself>>>Begin (Subtractions from Income)>>>Begin (Active Duty Military Pay). Enter the amount of excludable income in the field for Eligible Military Income.
Other Helpful Information:
If you file a joint tax return for federal purposes, you may file separately for California if either spouse was:
- An active member of the United States armed forces or any auxiliary military branch.
- A nonresident for the entire taxable year who had no income from a California source.
Nonrefundable Renter's Credit Qualification
Military personnel: California residents or part-year residents who paid rent for at least six months on their principal residence located in California and meet certain income requirements may claim this nonrefundable credit against their tax.