Military Spouse Issue

[BOB W]

In a past post someone asked about spousal taxation by states for military personel. NYS came out with its law relating to this issue.

1/11/10

http://www.tax.state.ny.us/pdf/memos/multitax/m10_1i_1mctmt.pdf

[ChEAr$]

In a past post someone asked about spousal taxation by states for military personel. NYS came out with its law relating to this issue.

1/11/10

http://www.tax.state.ny.us/pdf/memos..._1i_1mctmt.pdf

And Virginia also responded promptly, coming up with a special form for a military spouse
to file instead of a tax return to claim the withholding in 2009.

But still uncertain I think is though the federal law exempts spouses of military from
taxability in that non resident state, it doesn't seem to exempt military member himself
from taxability on a part time job! Huh??

But in case of a couple who are both serving at same post (say Fort Drum in NY),
concurrently and both having part time jobs, I suppose each would qualify under new
federal law since each is spouse of a military member!

Got to hand it to those congresspeople who think everything through before legislating.

[FEDUKE404]

Confusion

Trying to avoid NY returns ($$ fee) let me see if I've got this correct:

Joe Soldier works part-time at a hamburger joint while stationed in NY. That income is subject to NY non-resident income tax.

His non-military wife also works at the same hamburger joint. That income is NOT subject to NY non-resident income tax.

Bob Soldier and his wife Betty Soldier are both stationed in NY and both work part-time at the same hamburger joint as does Joe Soldier. Neither Bob nor Betty is subject to NY non-resident income tax on the 'burger income??

Who comes up with these rules??

FE

[Gene V]

Same for Oregon

Nonresidents stationed in Oregon

Oregon doesn’t tax your military pay if you’re a
nonresident stationed in Oregon. If you’re married
and your spouse is a nonresident who only came to
Oregon to be with you while you are stationed here,
then Oregon doesn’t tax your spouse’s income from
services performed in Oregon. It is not considered
Oregon-source income.

[BOB W]

Trying to avoid NY returns ($$ fee) let me see if I've got this correct:

Joe Soldier works part-time at a hamburger joint while stationed in NY. That income is subject to NY non-resident income tax.

His non-military wife also works at the same hamburger joint. That income is NOT subject to NY non-resident income tax.

Bob Soldier and his wife Betty Soldier are both stationed in NY and both work part-time at the same hamburger joint as does Joe Soldier. Neither Bob nor Betty is subject to NY non-resident income tax on the 'burger income??

Who comes up with these rules??

FE

Good recap.......................But it looks like this is more than a NYS issue.

[travis bickle]

Let's have a friendly argument about this.

Trying to avoid NY returns ($$ fee) let me see if I've got this correct:

Joe Soldier works part-time at a hamburger joint while stationed in NY. That income is subject to NY non-resident income tax.

His non-military wife also works at the same hamburger joint. That income is NOT subject to NY non-resident income tax.

Bob Soldier and his wife Betty Soldier are both stationed in NY and both work part-time at the same hamburger joint as does Joe Soldier. Neither Bob nor Betty is subject to NY non-resident income tax on the 'burger income??
emphasis added

Who comes up with these rules??

FE

PL 111-97 [The Military Spouses Residency Relief Act] specifically states . . .
"(c) Income for services performed
by the spouse of a servicemember shall not be deemed
to be income for services performed or from sources within a tax
jurisdiction of the United States if the spouse is not a resident
or domiciliary of the jurisdiction in which the income is earned
because the spouse is in the jurisdiction solely to be with the
servicemember serving in compliance with military orders.’’http://www.coherentbabble.com/PublicLaws/PL111-97.pdf

Therefore, if Bob & Betty Soldier have both received orders to NYS [or any taxing jurisdiction] their non-military pay earned at that location is subject to state/city taxation because neither spouse traveled there solely to accompany [a] military member. Each person traveled to that locale because they each received orders sending them there.

The amount of income may be insignificant ["burger income"] or may be significant [think of two married doctors working part time in a downtown clinic].

[FEDUKE404]

Pick a position - ANY position

PL 111-97 [The Military Spouses Residency Relief Act] specifically states . . .
"(c) Income for services performed by the spouse of a servicemember shall not be deemed to be income for services performed or from sources within a tax jurisdiction of the United States if the spouse is not a resident or domiciliary of the jurisdiction in which the income is earned because the spouse is in the jurisdiction solely to be with the
servicemember serving in compliance with military orders.’’http://www.coherentbabble.com/PublicLaws/PL111-97.pdf

Therefore, if Bob & Betty Soldier have both received orders to NYS [or any taxing jurisdiction] their non-military pay earned at that location is subject to state/city taxation because neither spouse traveled there solely to accompany [a] military member. Each person traveled to that locale because they each received orders sending them there.

The amount of income may be insignificant ["burger income"] or may be significant [think of two married doctors working part time in a downtown clinic].

...unless you take the approach as explained by ChEAr$ earlier:

"But in case of a couple who are both serving at same post (say Fort Drum in NY),
concurrently and both having part time jobs, I suppose each would qualify under new
federal law since each is spouse of a military member!"

Of course, I'm curious to see how the respective states are going to handle sending out the non-payment / non-filing notices to all those spouses who received a W2 from the burger joint work and yet did not "report" the income.

FE

[travis bickle]

Seems to be no issue

...unless you take the approach as explained by ChEAr$ earlier:

"But in case of a couple who are both serving at same post (say Fort Drum in NY),
concurrently and both having part time jobs, I suppose each would qualify under new
federal law since each is spouse of a military member!"

Of course, I'm curious to see how the respective states are going to handle sending out the non-payment / non-filing notices to all those spouses who received a W2 from the burger joint work and yet did not "report" the income.

FE

the law clearly states that it pertains in cases where/when the spouse travels to the new locale ". . .solely to be with the servicemember . . ." [emphasis added].

When a married couple, both of whom are in the military, travel to a new locale because they are both in receipt of military orders, they have not traveled "solely to be with the servicemember". Instead, they traveled because they each had valid orders obligating them to do so. And the situation described in PL111-97 does not pertain.

How the states are to track and reconcile these sitations are other [absurd] questions..

[FEDUKE404]

Nature of the question

the law clearly states that it pertains in cases where/when the spouse travels to the new locale ". . .solely to be with the servicemember . . ." [emphasis added].

When a married couple, both of whom are in the military, travel to a new locale because they are both in receipt of military orders, they have not traveled "solely to be with the servicemember". Instead, they traveled because they each had valid orders obligating them to do so. And the situation described in PL111-97 does not pertain.

How the states are to track and reconcile these sitations are other [absurd] questions..

One person's "absurd" question can well be another person's "relevant" question.

For my 2¢ worth, I think it IS quite likely that a "legitimate" military spouse could see state withholding appear on a Form W2 that would not otherwise require the filing of the relevant state's income tax return. But, perhaps such an "absurd" event would never occur....

Have a good day, nevertheless.

FE

[BOB W]

One person's "absurd" question can well be another person's "relevant" question.

For my 2¢ worth, I think it IS quite likely that a "legitimate" military spouse could see state withholding appear on a Form W2 that would not otherwise require the filing of the relevant state's income tax return. But, perhaps such an "absurd" event would never occur....

Have a good day, nevertheless.

FE

NYS has 3 ways of solving withholding issues for the non-military spouse working in NYS while military spouse is stationed in NYS. They have an Exempt form to give to the employer that allows no state withholding. Second, the IT-203 has a check box saying they are just filing to get a refund of any withholding. Third, NYS allows employers to give back any withholding by 3/31/10 for any withholding prior to the new law.

[BOB W]

Trying to avoid NY returns ($$ fee) let me see if I've got this correct:


Bob Soldier and his wife Betty Soldier are both stationed in NY and both work part-time at the same hamburger joint as does Joe Soldier. Neither Bob nor Betty is subject to NY non-resident income tax on the 'burger income??

FE

Just guessing at this point, but since Bob and Betty are in the military they would be subject to NYS Income Tax on non-military income. Spousal Issue seems to not apply. The Military may have taken into consideration that they are married and stationed them together but I don't think NYS cares and will tax them on non-military work.

[ChEAr$]

I can now agree with travis re the language describing a military spouse traveling to that
state SOLELy to be with spouse.