Military Pay
Resident - If the service member is a resident of Iowa and stationed in Iowa on active duty, they are permitted to subtract their military pay. Iowa follows federal law and provides income tax relief for servicemembers on active duty in combat zones.
To exclude active duty military pay in TaxSlayer ProWeb, from the Iowa Return menu select:
- Subtractions from Income
- Active Duty Military Pay
Nonresident - If the taxpayer is a nonresident of Iowa stationed in Iowa whose only source of income is active duty military pay, they are not required to file an Iowa return.
One spouse is a resident of Iowa 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 an Iowa 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 Iowa .
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 Iowa , the following conditions must be met by the military spouse/employee:
- the servicemember spouse is a member of the uniformed services present in Iowa in compliance with his or her orders
- the non-servicemember spouse is present in Iowa solely to be with the servicemember spouse
-
the non-servicemember spouse is a resident of another state
- the non-servicemember spouse elects to use the same residence as the servicemember spouse for tax purposes.
If the military spouse meets the eligibility requirements, they can avoid Iowa state tax from being withheld from their pay by providing their employer with Form IA W-4 Employee Withholding Allowance Certificate.
To claim a refund of taxes withheld from the Iowa income in error, from the nonresident Iowa Return menu select:
- Basic Information
- Adjustments to Income Subject to Tax
- Other Adjustments - If this is not the first adjustment, click + Add Other Adjustment.
- Amount - Enter amount of wages as a positive number.
- Adjustment Type - From the dropdown menu select Military Exemptions.
Note: This is an article on reporting military pay and military spouse pay in TaxSlayer ProWeb. It is not intended as tax advice.
Additional Information:
IA DOR: Military Tax Information
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.