MFJ federal return. Taxpayer is active duty military with home of residence VT so he always files as Vermont resident. While stationed in CO he married a lady from CO. He is now stationed in NY and she works from home for same company she worked for in CO before getting married and is still having CO tax withheld. They both have CO driver's licenses and plan to keep these. Not sure how to file state for spouse? What help can you give me. I do know that spouse can claim state of residence of spouse if there due to active duty. So I was thinking have her claim VT and file as non resident of CO since the company she works for withheld CO. But not sure with CO driver's license if that would be correct. Nothing seems correct so I need assistance. Thank you in advance for any help you can give me
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File the states as MFS and Federal as MFJ. Your program should have the ability to TEST if Joint or separate is better tax wise. Use the MFS created files to file the state returns. Do not destroy the MFJ initial return. Update the CO return to Non-resident or Part Year resident as needed. Hope this gets you started.
Be sure that your MFJ return is complete in all aspects, like coding taxpayer specific items on the MFJ return before creating the MFS returns.Last edited by BOB W; 05-08-2024, 07:38 PM.This post is for discussion purposes only and should be verified with other sources before actual use.
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Bob W that's not the question I'm asking about joint or separate. Some states mandate you file the same as on federal. The questions is does the spouse file as a resident of Vermont or Colorado or New York even? I don't know what state she should be paying taxes to.Comment
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Question is -where is wife presently residing? It's not clear whether it's Colorado or New York. "Working from home" doesn't disclose which state she's in.
I had a married couple situation where MFJ for Federal, but - he lived in NJ, she lived in NY as full time residents, he had NY W-2 income.
So for him, he was a NY non-resident, NJ resident. Wife was a full time NY resident. Both had NJ driver licenses. State returns had to be MFS returns.Uncle Sam, CPA, EA. ARA, NTPI FellowComment
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I'm sorry if I didn't make it clear. I just thought when I said he is stationed in New York it would be known that is where they live. They live in New York and she works from home while living in New York due to her husband being stationed there in the ArmyOriginally posted by Uncle Sam View PostComment
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You will need to to a MFJ Federal as you stated. Then you will need to do a non-resident Colorado return to report her income and tax credit for tax paid. I am not familiar with CO tax returns.
Then you would file a MFJ NY return and take credit for the tax paid to Colorado. (NY Form IT-112-R for tax paid to another state).Uncle Sam, CPA, EA. ARA, NTPI FellowComment
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Since VT is his enlistment state, are they still withholding VT taxes?This post is for discussion purposes only and should be verified with other sources before actual use.
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If the husband is on active military duty, AND VT is his "home of record" state (as supported by VT state tax withholding), the way I understand things is he should have ZERO state income tax liability to either CO or NY. There may be some strange state laws that would tax HIS income, but I'm not aware of any.
Is there a possibility his / their "home" state can be considered VT, thus a VT MFJ return for the couple with tax credits from other states ("non-resident" or something)?
The rules for military spouses are convoluted and almost require a state-by-state analysis. I have a client whose home of record is FL (how convenient!) and person has been on active duty in CO and CA with no state taxes paid. Things got shaky when a CA Sch C enterprise was started. And, of course, client's high school age child DID have to pay CA taxes on summer job income.
As noted above, NY often sees things quite differently so they may end up getting involved (number of days in state etc).
Curious: What was purpose of getting CO drivers license? It is generally a fairly easy manner to renew a "home" DL. . .I did so when I was stationed in Germany years ago.
It IS possible for a military person to change their home of record, but the military folks keep a pretty close eye on such requests. (Otherwise there might be a lot [more] of FL or TN "residents" appearing.)
This thread will be interesting to follow. Perhaps we all can become better educated on the topic.Comment
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FWIW, TheTaxBook (our host) WebLibrary Plus subscription includes separate guides for each state, as well as a 26-page guide for military servicemembers. I would hope at least some answers from this thread could be found there (sorry I can't help with the OP, not an area I have much experience with)."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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Here's a NYS Tax Guide for Military Personnel that might help you. https://www.tax.ny.gov/pdf/publicati...007/pub361.pdfUncle Sam, CPA, EA. ARA, NTPI FellowComment
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They are withholding VT tax for him only because he allows them to even though it's not necessary because VT does not tax his active duty payOriginally posted by BOB W View PostComment
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So he gets a refund when he files his " home state" return?This post is for discussion purposes only and should be verified with other sources before actual use.
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Yes he gets everything back that was withheld because he doesn't pay state tax to VT on active duty payOriginally posted by BOB W View PostComment
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Yes I understand, NO TAX in VT. But he is still required to file his home state even if no tax withheld in addition to any other state as a Non-Resident.This post is for discussion purposes only and should be verified with other sources before actual use.
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Does not the husband have to declare ALL income as taxable to VT, such as investment income etc, even though apparently his active duty military pay is exempt from VT taxation? Any foreign state income taxes could generate a tax credit for VT.Originally posted by BOB W View Post
I'm still a bit confused as to where the income of the spouse goes. Perhaps also to VT (after marriage) with some foreign state credit. Perhaps a State A and State B part-year resident for her?
(I still can't figure why any CO drivers licenses came into play.)
But I continue to read and learn. . .Comment
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