military

[llysongtseng]

i found in the tax book on pg 8-11 that for military members, their tax home is his/her permanent duty station.

my brothers lived here in mn before joining the military but both are now stationed in different states. last year to my understanding, they could file as residents of mn because mn did not consider military members non residents. but for 2005, can they still file as mn resident or would they have to file with the state that they are stationed in?

and for the one brother, he's married-stationed in ok but wife is here with house?

i am fairly new to filing for military so any help with that would be much appreciated.
thanks

[Nancy]

Residency status of military

Here is a link with a good explanation for MN residency rules for military.

http://www.taxes.state.mn.us/individ/residency_and_filing_status/definition/residency_active_duty_military.shtml

[Bill Tubbs]

Tax home does not necessarily equal residency/domicile.

My understanding of military is that they maintain their state of residency unless they do specific actions to change their residency. Some military people will try to change their residency to Texas, Florida, or another state that does not have income tax.

>> one brother, he's married-stationed in ok but wife is here with house?<<

This brother could then do a MFJ MN return.

There was also a law passed a couple years ago that OK, in this case, could not tax military personnel stationed in OK if they maintained their residence in another state.

Bill

[rosieea]

Military personnel have a "home of record," which is the home state upon entry into the service. This never changes, unless the service member takes specific steps to change it. Home-of-Record States generally do not tax military members who are stationed outside that state for the entire tax year. The Tax Home state, unless it is also the home of record, does not tax the military pay of the member, but will tax other income earned in the state. Needless to say, Florida, Texas, and other no-income-tax states are quite popular when it come to changing homes of record.

[llysongtseng]

thanks

thanks for the help and info...i wasnt aware of the new law regarding military personnel and that really helped clear things up for me. thanks again

[Ann Von Hagel]

military taxation

The Soldiers and Sailors Civil Relief Act was actually passed quite a while ago and basically says that the state the military member is stationed in has no right to tax his or her military pay or benefits. However, his home state as shown on his W-2 can and in many cases will.

Some states exempt their military citizens who are stationed out of state. Sometimes they have to file to get the exemption, sometimes it's automatic. Many states require military citizens to file and pay tax as though they had actually lived in the state.

The military member generally can not change his state of residence unless he at some point is "permanently" stationed in that state. So the folks you see who have Florida, Texas, etc. as states of residence were probably at one time stationed there. They do have to basically declare a "fixed and definite intention" to return to that state at the end of their service. They ought to get drivers licenses there and register to vote.

The state where the military member is stationed CAN tax income earned in that state, say if the person has a part time job. Also, spouses don't get the same benefit. In most states, if they are employed, they are considered residents of that state, no matter where the military member spouse is 'officially' a resident. This means they may file a joint federal return, but may have to do separate state returns.

Once the military member retires, the Soldiers and Sailors relief ceases to apply and they are treated like any civilian when determining residency.

Ann Von Hagel, EA
Arlington, VA