Military Pay
Resident - If the taxpayer is a resident of Maine they are subject to Maine income tax on all income regardless of the source. This includes active duty military pay. There is an exception to this rule for a resident active duty taxpayer stationed outside of Maine during the tax year. The military income earned while serving outside of Maine can be subtracted from income on the Maine resident return.
To subtract military income earned outside of Maine in TaxSlayer Pro, from the Maine resident return select:
- Subtractions to Federal AGI
- Non-Maine Active Duty Military Pay - Enter the active duty military pay as a positive number.
Nonresident - If the taxpayer is a nonresident of Maine stationed in Maine whose only source of income is active duty military pay, they are not required to file a Maine return.
One spouse is a resident of Maine 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 Maine resident, and is instead a resident of another state, his or her spouse can elect to also be a resident of that state rather than Maine.
Maine allows taxpayers to file as Single even when they have filed joint on their federal return. To change the filing status to Single , from the Maine resident tax return select:
- Personal Information
- Filing Status - Select Single and who the return is for.
Note that if the selection is for the taxpayer as the Single resident of ME, they will be required to complete Schedule NRH. If the listed spouse is the Single Resident of ME, the return will have to be printed and mailed or you will need to change the ME resident to the primary taxpayer position in the federal section of the return and then add the state return again.
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 Maine , the following conditions must be met by the military spouse/employee:
- The military spouse is located in Maine solely to be with the service member;
- The service member is located in Maine in compliance with military orders;
- The service member and the spouse were residents or domiciled in the same state other than Maine immediately prior to being located in Maine.
If the military spouse meets the eligibility requirements, they can avoid Maine state tax from being withheld from their pay by providing their employer with a Form W-4ME Employee’s Withholding Allowance Certificate.
To claim a refund of taxes withheld from the Maine income in error in TaxSlayer Pro, from the nonresident Maine Tax Return menu select:
- Schedule NR
- Total Income
- Wages, Salaries, Other
- Income from Non-Resident Period - Maine - Adjust the amount shown by entering as a negative number the amount of wages not subject to Maine income tax.
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer Pro program. It is not intended as tax advice.
Additional Information: