DanielV01
Expert Alumni

Retirement tax questions

Not directly, but you are allowed to claim it.  I'll give an example of how, even though I don't know what the states are (I don't have access to your file in this public forum).

Let's say the active duty spouse has an SLR of Texas and the Military Spouse was from Missouri, and that's where you are stationed.  The Military spouse has never established residency in Texas.  Prior to 2018, the military spouse (non-active duty) would have been required to pay tax to Missouri on his/her income.  However, because of the Veterans Benefits and Transitions Act of 2018, that non active-duty spouse may now claim the same state of residency for 2018 as the active-duty spouse, Texas, which has no state tax.

Since MO tax was withheld, it will be necessary to file a MO nonresident return with zero income.  Do not e-file the return.  Rather, mail in the return with the following written at the top:  Per the Veterans Benefits and Transitions Act of 2018, I elect Texas as my state of residency.  The income tax withheld by MO by law must be refunded.

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