Military Pay
Resident - If the taxpayer is a resident of Nebraska, they are subject to Nebraska income tax on all income regardless of the source. This includes active duty military pay.
Nonresident - If the taxpayer is a nonresident of Nebraska stationed in Nebraska whose only source of income is active duty military pay, they are not required to file a Nebraska return.
One spouse is a resident of Nebraska 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 Nebraska resident, the spouse can elect to also not be a resident of Nebraska.
Generally, Nebraska does not permit a filing status change from the federal return. An exception is made if one spouse is a resident of Nebraska, and the other spouse is a resident of a different state. To choose the filing status of Married Filing Separately in TaxSlayer Pro, from the Nebraska Resident Return select:
- Personal Information
- Filing Status - Select Married Filing Separately, who the MFS return is for, and manually change all figures.
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 Nebraska, the following conditions must be met by the military spouse/employee:
- The servicemember is present in Nebraska solely in compliance with military orders.
- The spouse is in Nebraska solely to be with the servicemember.
- The spouse is a legal resident of the same state as the servicemember.
If the military spouse meets the eligibility requirements, they can avoid Nebraska state tax from being withheld from their pay by providing their employer with Form 9N Nebraska Nonresident Employee Certificate.
To claim a refund of taxes withheld from the Nebraska income in error, from the Nebraska Nonresident Return select:
- Income Allocation
- Total Adjustments to Nebraska Income
- New - Enter the Description (e.g. servicemember spouse income), and enter Amount of the spouse's income as a positive 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:
Nebraska Individual Income Tax Booklet
Nebraska Income Tax for U.S. Servicemembers, Their Spouses, and Civilians Working with U.S. Forces
Nebraska FAQs for Military Spouses and their Employers
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.