Military Pay
Resident - If the taxpayer is a resident of Ohio they are subject to Ohio income tax on all income regardless of the source. This includes active duty military pay.
There is an exception to this rule for resident active duty taxpayers who are stationed outside of Ohio during the tax year. The military income earned while serving outside of Ohio can be subtracted from income on the Ohio resident return.
To subtract this income, from the Ohio Resident Tax Return menu select:
- Ohio Taxable Income
- Total Deductions
- Military Pay for OH Residents Stationed Out of OH - Enter the qualified income as a positive number.
Nonresident - If the taxpayer is a nonresident of Ohio stationed in Ohio whose only source of income is active duty military pay, they are not required to file an Ohio return.
One spouse is a resident of Ohio 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 an Ohio resident but is a resident of another state, his or her spouse can elect to also be a resident of the other state.
Ohio does not permit a different filing status from the federal return, so when the spouses' residencies differ they will need to assess whether they wish to file their federal return jointly or separately, and if separately determine the appropriate state return for each.
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 Ohio, the following conditions must be met by the military spouse/employee:
- The servicemember and spouse have the same state of legal residence
- The spouse is only accompanying the servicemember as part of military orders.
If the military spouse meets the eligibility requirements, they can avoid Ohio state tax from being withheld from their pay by providing their employer with Form IT MIL-SP Exemption from Withholding – Military Spouse Employee.
To claim a refund of taxes withheld from the Ohio income in error, from the nonresident Ohio Tax return menu select:
- Ohio Taxable Income
- Total Deductions
- Certain income earned by military nonresidents - Enter the wages as a positive number.
If the taxpayer is filing as a nonresident of Ohio, complete Form IT-NRS Ohio Nonresident Statement within the program. The form cannot be e-filed with the return but must be printed, signed, and mailed separately. The mailing address is included on the form.
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:
Ohio DOT: Income Tax Instruction Booklet