NicciT

Hi all

Not sure if anyone can help me - the tax department in Virginia is a little confusing.

My husband is Active Duty Navy and was told that I don't have to pay state tax on my wages under the Military Spouse Residency Relief Act that came in to effect last year. When I'm reading it though I'm not sure that I would qualify for it as I've got my permanent resident card and so I'm thinking that would make me a resident of Virginia and so I would have to pay Virginia taxes.

Anyone have any ideas at all?

Thanks!

Duncan Roberts

Why would being a permanent resident make you a resident of Virginia?

NicciT

I don't know - I'm confused! Is that not the case then? The answer I just got was:_

1. I am a military spouse living in Virginia, am I exempt from filing income tax in Virginia under the Military Spouse Relief Act?
Yes, provided the following apply:
§ You are present in Virginia solely to be with your service member spouse who is permanently stationed here in compliance with military orders
§ You and your service member spouse have the same home of record
§ Income you earned in Virginia is from wages received as an employee. Some income received from self-employment also qualifies

If you meet one of these requirements then you would be exempt

The one that throws me off is that we don't have the same home of record. I don't want to do anything wrong and get stung with filing penalties so I'm very cautious and appreciate any help.

I just thought if I have my Permanent Resident card then whatever state I'm in is my resident state? As you can tell I have no idea!!!

Rete

He is your husband. What do you think is his home of record?

Of course, it is with you. Just because he is on active duty and away, doesn't mean his home of record is different than yours.

Duncan Roberts

Permanent resident is an immigration status, it just means you are allowed to live and work in the US. I would have thought that if your husband is in the military then he would have access to tax accountants that would likely be expert in this area.

meauxna

I don't see immediately how this bill would affect/benefit you.

http://www.military.com/finance/taxe...ate-taxes.html
"Currently military service members can keep their home state of record/state of legal residence for tax, voting, car registration and other purposes, regardless where they are stationed."

You don't have a home in another US state, right? You only lived in Virginia?

Requirements for spouse eligibility

The spouse of a servicemember is exempt from income taxation by a state when all three of these qualifications are met.

The spouse:

1. Currently resides in a state different than the state of his or her domicile;
2. Resides in the state solely in order to live with the servicemember; and,
3. The servicemember is present in the state in compliance with military orders.

NOTE: Some states also require a fourth qualification: The spouse and the servicemember both are able to claim the same domicile.

Check requirements for your state here: State Tax Websites.

An example of how this law could affect military couples

Consider the example of Matthew who grew up in South Carolina. He married Michelle in South Carolina and joined the military while there. Matthew kept South Carolina as his home of record.

In 2007 Matthew received a permanent change of station to Maryland and Michelle accompanied him. They both worked and lived in Maryland.

When preparing their 2008 state income taxes, Matthew filed a South Carolina resident return and Michelle filed with Maryland a Maryland resident return.

In 2009 Michelle continued working in the state of Maryland, which withheld state income taxes from her paycheck.

With the new law, she has chosen to change her state of residency for taxes and other purposes like voting and car registration, to the same state of record as Matthew which is South Carolina.

So when preparing her 2009 taxes, she will file a Maryland state tax return to recover her withholding. She’ll also file a South Carolina joint resident return with Matthew that includes her earnings and other taxable income such as interest and dividends.

In 2010, she will file a South Carolina joint return with Matthew.

The law, however, has not changed in regard to “non-military” income that a service member earns in addition to service wages. The state in which a military service member resides can still tax the service member’s non-military income earned in that state.

If Matthew has been working weekends at the local Home Depot, Maryland can still tax his non-military earnings. He’ll file a Maryland nonresident return and pay tax. On their South Carolina return, Matthew and Michelle will get an “out-of-state” tax credit for the amount of tax he paid to Maryland.



There are some military tax tips for Virginia here: http://www.tax.virginia.gov/site.cfm...ilitaryTaxTips

In your first post, you say you think you don't have to pay state income tax on your wages at all; the way I read it, that isn't so.

frrussre

Do you have a driving license, what State is it from, same question for your husband?
What State is husband registered to vote in?

When called to Military duty, in another State or country, your residency remains in the state you came from, there is an assumption, you will go back there one day.

Usually true, for University students, especially when in a dorm, though can continue, as long as you say your intentions are to return to that State. Some States for tax purposes will disagree.

Reg. Frank R.

Bomjeito

You are considered resident to the state you can provide most evidence, including intent to return (i.e., driver's license.)

Each state has its own agreements with other states on taxation. For example, I once lived a year in Pennsylvania but was still considered a resident of NY for tax purposes. I did hold a lease in Pennsylvania and had all intentions to remain in Pennsylvania. That year, I did file PA taxes, but also filed in NY to prove that I paid state taxes somewhere , as I still held a NY State driver's license.

What address does your husband use for Home of Record? Even when I worked for the State Dept, my HOR determined my state taxes, not Washington, DC, because I worked overseas and technically did not live in my home state.

Also, US Military isn't an elite agency with tax advisors. However, there are enlisted support groups that you do have access to ask such questions.

As for your PR - what address did you list with USCIS? Remember your address should reflect your residency address.

What address does your husband use as HOR? That is where he, and most likely you, are paying state taxes.

bevinva

Lots of military people in the US will claim a HOR in a state that does not require you to pay state taxes, all they need is a family member in that state who will let them use that address. Since this is the address the military will pay to ship your household goods to when you retire they might change that at the last minute. However,
http://www.tax.virginia.gov/site.cfm...esidencystatus

•The most common instance of mixed residency status occurs when one spouse is a Virginia resident and the other is a nonresident who has no liability in Virginia. Married couples frequently encounter this situation when one spouse is in the military, stationed in Virginia, and claims another state as his or her home of record. In a case like this, the resident spouse must file a separate return under Filing Status 3. The resident spouse may not automatically claim all of the exemptions for dependents or all of the itemized deductions reported for federal income tax purposes. Federal rules must be applied to determine the allowable amounts. As a general rule, the spouse claiming an exemption for a dependent must be reporting at least half of the total federal adjusted gross income. In addition, the spouse must be able to support his/her claim of itemized deductions. If the nonresident spouse has any Virginia source income to report, he/she must file a separate return on Form 763.