Military Pay
Resident - If the taxpayer is a resident of Pennsylvania they are subject to Pennsylvania 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 Pennsylvania during the tax year. The military income earned while serving outside of Pennsylvania can be subtracted from income on the Pennsylvania resident return.
This income must be manually subtracted from the Pennsylvania resident return by selecting:
- Adjustments to Income
- Military Pay Adjustment - Enter the qualified military income as a negative number.
Nonresident - If the taxpayer is a nonresident of Pennsylvania stationed in Pennsylvania whose only source of income is active duty military pay, they are not required to file a Pennsylvania return.
One spouse is a resident of Pennsylvania 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 Pennsylvania 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 Pennsylvania.
Pennsylvania 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:
- Basic Information
- Filing Status Information - Select Married Filing Separate and indicate who is filing the separate return.
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 Pennsylvania, the following conditions must be met by the military spouse/employee:
- The service member must be in Pennsylvania in compliance with military orders.
- The service member’s spouse must be in Pennsylvania solely to be with his/her spouse.
- The service member’s spouse must have the same domicile (legal residence) as the service member.
If the military spouse meets the eligibility requirements, they can avoid Oregon state tax from being withheld from their pay by providing their employer with Pennsylvania Form REV-419, Employee’s Nonwithholding Application Certificate.
To claim a refund of taxes withheld from the Pennsylvania income in error, from the nonresident Pennsylvania Tax return menu select:
- Adjustments to Income
- Military Pay Adjustment - Enter the qualified spouse income as a negative 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: