Military Pay
Resident - If the taxpayer is a resident of Rhode Island they are subject to Rhode Island income tax on all income regardless of the source. This includes active duty military pay.
Nonresident - If the taxpayer is a nonresident of Rhode Island stationed in Rhode Island whose only source of income is active duty military pay, they are not required to file a Rhode Island return.
One spouse is a resident of Rhode Island 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 Rhode Island resident but is a resident of another state, his or her spouse can elect to also be a resident of the other state.
Rhode Island allows taxpayers to choose a married filing separately filing status even if they used married filing jointly on the federal return when one spouse is a resident of Rhode Island and the other is not. To choose to file Married Filing Separately, from the Rhode Island resident return menu select:
- Basic Information
- Change Filing Status from MFJ to MFS for State purposes only - Select Yes.
- MFS for State Purposes Only - Select who is filing the MFS return 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 Rhode Island, the following conditions must be met by the military spouse/employee:
- The servicemember’s spouse moves to Rhode Island solely to be with the servicemember complying with military orders sending him/her to Rhode Island.
- The servicemember and the servicemember’s spouse must also share the same non-Rhode Island domicile.
If the military spouse meets the eligibility requirements, they can avoid Rhode Island state tax being withheld from their pay by providing their employer with Rhode Island Form W-4 - Employee’s Withholding Allowance Certificate.
To claim a refund of taxes withheld from the Rhode Island income in error, you'll need to adjust the wages pulling into the Rhode Island return. To do this, from the Rhode Island Nonresident Tax Return menu select:
- Subtractions from Income
- Active Duty Military Pay of Nonresidents and Income from RI for Service Member's Spouse - Enter the allowable wages as a positive number.
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer ProWeb program. It is not intended as tax advice.
Additional Information: