Military Pay
Resident - Military income is excluded from taxation in Minnesota. To subtract military income in the Minnesota individual return, from the Minnesota tax return menu select:
- Total Subtractions
- Federal Active Duty Military Pay - Enter the military pay as a positive number.
Nonresident - If the taxpayer is a nonresident of Minnesota stationed in Minnesota whose only source of income is active duty military pay, they are not required to file an Minnesota return.
One spouse is a resident of Minnesota and the other is not - Minnesota does not allow a MFS filing status if the federal return is MFJ. The Minnesota resident will need to file a nonresident return for the resident income.
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 Minnesota, the following conditions must be met by the military spouse/employee:
- The service member spouse must be in Minnesota on military orders
- The non service member spouse must be in Minnesota solely to be with the servicemember
- The non service member spouse must be domiciled in another state
If the military spouse meets the eligibility requirements, they can avoid Minnesota state tax from being withheld from their pay by providing their employer with (a) a current valid military identification, (b) a current Leave and Earnings Statement, and (c) Minnesota Form W-4MN Withholding Allowance/Exemption Certificate.
To claim a refund of taxes withheld from the Minnesota income in error, follow these steps from the Minnesota nonresident state return menu:
- Nonresident Income Allocation
- Total Income
- Wages, Salaries, Tips etc.
- Adjustments to State Wages (+/-) - Enter the spouse wages as a negative number.
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:
MN DOR: Military Personnel – How Minnesota Taxes Your Income
MN DOR: Minnesota Active-Duty Residency