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 ProWeb, from the Nebraska Resident Return select:
- Basic Information
- Change Filing Status from MFJ to MFS for State purposes only - Select Yes.
- MFS for State purposes only - Select who the return is for and 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 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 in error in TaxSlayer ProWeb, from the Nebraska Nonresident Return select:
- Income Subject to Tax
- Amounts Derived from Nebraska Sources
- Income of a Servicemember's Spouse - Enter the spouse wages 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:
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.