Military Pay
Resident - If the service member is a resident of Idaho and stationed in Idaho, they are subject to Idaho income tax on all income regardless of the source. This includes active duty military pay.
If the service member is a resident of Idaho but stationed outside of Idaho, they may be able to exclude part of their military pay if:
- The servicemember joined the armed forces while they were a resident of Idaho and Idaho is their registered address;
- The servicemember was on active duty for 120 consecutive days or more during the tax year;
- The servicemember was stationed outside the state of Idaho for all or least part of the year.
If they meet the above requirements, they will still declare all income, however only military income earned while serving in Idaho and all non-military income would be subject to tax.
To subtract the military income earned outside the state of Idaho in TaxSlayer ProWeb, from the resident Idaho Return menu select:
- Deductions From Income
- Active Duty Military Pay Earned Outside of Idaho - Enter the amount earned outside of Idaho as a positive number.
Idaho follows federal law and provides income tax relief for servicemembers on active duty in combat zones.
Nonresident - If the taxpayer is a nonresident of Idaho stationed in Idaho whose only source of income is active duty military pay, they are not required to file an Idaho return.
One spouse is a resident of Idaho and the other is not - A servicemember’s spouse may elect, for income tax purposes, to use the same state of residence as the servicemember. If a servicemember is not a Idaho resident, and is instead a resident of another state, his or her spouse can elect to also be a resident of that state and not a resident of Idaho.
Idaho does not permit a filing status change from the federal return. If they are married filing joint on the federal return, they are required to file married filing joint on the Idaho return and the spouse will be required to use the same residency status as the servicemember.
Residency Status - The Idaho nonresident return offers additional residency statuses for military members beyond the normal resident, part year, or nonresident options.
To indicate the applicable residency status in ProWeb, from the nonresident Idaho Return menu select:
- Basic Information
-
Select your residency status
- Select Active Military Resident if the taxpayer or spouse is a member of the armed forces on active military duty outside Idaho and Idaho is their state of permanent residence (An Idaho resident on active military duty in or outside Idaho must file on Form 40 (a resident return) unless their spouse is a part-year resident or nonresident.)
- Select Military Nonresident if the taxpayer or spouse were in Idaho on military orders but their state of permanent residence is another state
Spouse Income - Military Spouses Residency Relief Act (MSRRA)
The MSRRA allows military spouses who reside with their service member spouse stationed in a nonresident state on military orders to keep their resident state for tax purposes. This means if the spouse has income from the nonresident state, they are not required to pay taxes to the nonresident state but report this income on their resident state return.
In order to be eligible for the income exemption under the MSRRA in Idaho, the following conditions must be met by the military spouse/employee:
- The spouse is married to a servicemember who is serving in Idaho and the servicemember registered their home of record in another state, and
- The spouse moved to Idaho with the servicemember and have the same domicile (permanent residence) as the servicemember’s home of record
If the military spouse meets the eligibility requirements, they can avoid Idaho state tax from being withheld from their pay by providing their employer with Form ID-MS1 Employee’s Idaho Military Spouse Withholding Exemption Certificate.
To claim a refund of taxes withheld from the Idaho income in error, from the Idaho Nonresident Tax Return menu select:
- Deductions from Income
- Other Subtractions
- State - Other Subtractions - Enter the spouse wages as a positive number and enter MSRRA as the description.
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer ProWeb program. It is not intended as tax advice.
Additional Information:
Idaho State Tax Commissioner Income Tax for Active-Duty Military
While TaxSlayer Pro strives to make the information and links contained on this page as timely and accurate as possible, TaxSlayer Pro makes no promise or guarantee about the timeliness, accuracy or completeness of the contents of this page. The information contained on this page is for general information and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.