Filing State Income Taxes in the Military

When you’re constantly on the move, it can be hard to know where to file your state income taxes. Active-duty service members and their spouses have protections under the Servicemembers Civil Relief Act , 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

The 2023 Veterans Auto and Education Improvement Act of 2022 allows the active-duty service member and spouse to file state income taxes based on one of three choices: The residence or domicile of the service member, the residence or domicile of the spouse, or the permanent duty station of the service member. The service member Leave and Earnings Statement will indicate which state they are claiming as legal resident. 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:

• Maintaining voter registration and voting
• Filing and paying state income taxes
• Maintaining a driver’s license
• Registering vehicles and other indicators of intent

Your legal residence as shown by these factors should be the same place as your legal residence indicated on your LES.

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. The service member will file state taxes in the state or states where that income is considered earned. Spouse personal service income can be applied to any of the above locations.

Military spouses and state taxes

Military spouses may elect to use the residence or domicile of the service member, the residence or domicile of the spouse, or the permanent duty station of the service member for the purposes of taxation regardless of their current work location.

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 state where income was earned.

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? View calling options.