Military Pay
Resident - If the taxpayer is a resident of Utah they are subject to Utah income tax on all income regardless of the source. This includes active duty military pay no matter where it was earned.
Nonresident - If the taxpayer is a nonresident of Utah stationed in Utah whose only source of income is active duty military pay, they are not required to file a Utah return.
One spouse is a resident of Utah and the other is not - They can file separate state returns, one as a resident and the other as a nonresident. To accomplish this you'll need to prepare two tax returns:
- Federal MFJ return with the primary taxpayer being the Utah resident, and a Utah resident return filed MFS for the taxpayer.
- Federal MFS return for the spouse, and a Utah nonresident return for the spouse. (The federal return won't be filed, only the Utah return.)
To change the Utah resident return filing status to MFS, from the Utah Resident Menu select:
- Basic Information
- Change Filing Status from MFJ to MFS for State purposes only - Answer Yes to the question about changing the status.
- MFS for State purposes only - Select who the return is for and complete all applicable fields.
Spouse Income - Military Spouse 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.
To be eligible for the income exemption under the MSRRA in Utah , the following conditions must be met by the military spouse/employee:
- The spouse and the service member are residents of the same state outside Utah.
- The service member is in Utah under military orders.
- The spouse is in Utah solely to be with the service member.
If the military spouse meets the eligibility requirements they can avoid Utah state tax being withheld from their pay by providing their employer with a completed IRS Form W-4..
To claim a refund of taxes withheld from the Utah income in error, you'll need to adjust the wages pulling into the Utah return. To do this, from the Utah Nonresident Tax Return menu select:
- Subtractions from Income
- Subtractions from Income - Select New, enter the allowable wages as a positive number and select Nonresident Military Spouse Earned Income from the dropdown menu.
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:
UT STC: Publication 57: Military Personnel Instructions
UT STC: Form TC-40 Individual Income Tax Instructions
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