Military Pay
Resident - If the taxpayer is a resident of Wisconsin they are allowed a subtraction of active duty pay for active duty servicemembers as well as Reserve or National Guard members called into active duty. The military income earned while serving on active duty can be subtracted from income on the Wisconsin resident return.
To subtract this income in TaxSlayer ProWeb, from the Wisconsin Resident Tax Return menu select:
- Subtractions from Income
-
Reserve or National Guard Members
or
US Armed Forces Active Duty Pay - Enter the allowable wages as a positive number.
Note that the taxpayer cannot take a subtraction under both options for the same pay.
Nonresident - If the taxpayer is a nonresident of Wisconsin stationed in Wisconsin whose only source of income is active duty military pay, they are not required to file a Wisconsin return.
One spouse is a resident of Wisconsin 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 Wisconsin resident but is a resident of another state, his or her spouse can elect to also be a resident of the other state.
When one spouse is a resident and the other is a nonresident, the couple will need to file a nonresident Wisconsin 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 Wisconsin, the following conditions must be met by the military spouse/employee:
- The servicemember is present in Wisconsin in compliance with military orders.
- The spouse is in Wisconsin solely to be with the servicemember.
- The spouse maintains a domicile (legal residence) in another state.
If the military spouse meets the eligibility requirements, they can avoid Wisconsin state tax from being withheld from their pay by providing their employer with Form W-221, Nonresident Military Spouse Withholding Exemption.
To claim a refund of taxes withheld from the Wisconsin income in error, from the nonresident Wisconsin Tax return menu select:
- Income Subject to Tax
- Amount to adjust WI state wages - Enter the allowable wages 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:
WI DOR: Publication 128, Wisconsin Tax Information for Military Personnel and Veterans