Filing state income taxes in the military

What you need to know to avoid fines and penalties

By Military One Source on February 2, 2021

When you're constantly on the move, it can be hard to know where to file your state income taxes. Thankfully, active-duty service members and their spouses have protections under the Servicemembers Civil Relief Act (SCRA), including one regarding where to claim residency for the purposes of taxes and voting. There are rules for military service members and slightly different rules for military spouses.

Military OneSource MilTax services include free tax prep and e-filing software as well as consultations with experts to answer your questions about state taxes, the SCRA and other tax-related matters.

Active-duty service members and state taxes

Active-duty service members file state income taxes in their state of legal residence. Military service members are not required to change their legal residence when they move to a new state solely because of military orders; they may maintain their legal residence in a state where they have previously established it.

Your state of legal residence is the place where you claim to maintain a permanent legal residence, as demonstrated by a wide variety of factors that include:

Your legal residence as shown by these factors should be the same place as your legal residence indicated on your Leave and Earnings Statement.

SCRA rules for state income taxes apply only to the service member's military income. Income from other sources, including second jobs and rental property, are not covered by the SCRA protections and need to be reported to the state in which it was earned.

Military spouses and state taxes

Military spouses may elect to use their active-duty service member's state of legal residence for the purposes of taxation, as long as their current location is a result of their service member's military orders.

Military families in atypical situations are not always covered by these protections, and the military spouse may need to file in the state where they are physically residing.

Military children and state taxes

The provisions of SCRA do not apply to military children. If required to file state income taxes, they should file in the location where they physically reside.

Do you have questions about your federal or state income taxes? Schedule a free appointment with a Military OneSource MilTax consultant by calling 800-342-9647 or using live chat. OCONUS/International? Click here for calling options: