Military Pay
Resident - If the taxpayer is a resident of Massachusetts they are subject to Massachusetts income tax on all income regardless of the source. This includes Active Duty Military Pay.
Nonresident - If the taxpayer is a nonresident of Massachusetts stationed in Massachusetts whose only source of income is active duty military pay, they are not required to file an Massachusetts return.
One spouse is a resident of Massachusetts 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 Massachusetts 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 Massachusetts.
Massachusetts allows taxpayers to file as Married Filing Separately even when they have filed joint on their federal return. To change the filing status to MFS, from the Massachusetts resident tax return select:
- Basic Information
- Change Filing Status from MFJ to MFS for State Purposes Only - Select Yes.
- MFS for State Purposes Only - Complete all applicable fields.
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 Massachusetts , the following conditions must be met by the military spouse/employee:
- The non-military spouse is not a member of the U.S. armed forces.
- The non-military spouse is married to an active duty member of the U.S. armed forces.
- The non-military spouse is domiciled in a state other than Massachusetts.
- The service member's permanent duty station is in Massachusetts.
- The military spouse is in Massachusetts solely to be with the servicemember who is serving in compliance with military orders.
If the military spouse meets the eligibility requirements, they can avoid Massachusetts state tax from being withheld from their pay by providing their employer with Form M-4-MS Annual Withholding Tax Exemption Certificate for Nonresident Military Spouse.
To claim a refund of taxes withheld from the Massachusetts income in error, from the nonresident Massachusetts Tax Return menu select:
- Deductions
-
Enter the income as a positive number
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:
Massachusetts Filing Instructions