Military Pay
Resident - Active duty military income is excluded from taxation in Oklahoma. To subtract active duty military income in the Oklahoma individual return, from the Oklahoma resident tax return menu select:
- Deductions, Exemptions, & Adjustments
- Total Adjustments to OK AGI
- Military Pay Exclusion - Enter the military income as a positive number.
Nonresident - If the taxpayer is a nonresident of Oklahoma stationed in Oklahoma whose only source of income is active duty military pay, they are not required to file an Oklahoma return.
One spouse is a resident of Oklahoma 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 Oklahoma 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 Oklahoma.
Oklahoma allows taxpayers to file using a married filing separately filing status even if the federal return was filed as married filing joint. To make this selection in the program, select:
- Personal Information
- Filing Status - Select Married Filing Separately.
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 Oklahoma, the following conditions must be met by the military spouse/employee:
- The servicemember is present in Oklahoma in compliance with military orders;
- The spouse is in Oklahoma to be with the servicemember; and
- The spouse maintains the same domicile as the servicemember or elects to use the same residence for tax purposes as the service member in accordance with Veterans Benefits and Transition Act of 2018.
If the military spouse meets the eligibility requirements, they can avoid Oklahoma state tax from being withheld from their pay by providing their employer with Form OW-9-MSE Oklahoma Tax Commission Annual Withholding Tax Exemption Certification for Military Spouse.
To claim a refund of taxes withheld from the Oklahoma income in error, from the Oklahoma nonresident return select:
- Adjusted Gross Income
- Total Income
- Wages, salaries, tips, etc.
- Adjustments to State Wages (+/-) - Enter the spouse income as a negative number. Then answer the follow up question "The State Wage adjustment related to Federal Military Spouses Residency Relief Act?" with YES.
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: