I am military and it says I owe state taxes in a tax free state for military why?

Forum|Forum|5 years ago
February 23, 2021
1 reply
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I am from Arizona and my residency us there. I am currently active duty and I shouldn't have to pay state taxes as military.

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DanaB27

Please be aware if your military income is your only income then you are not required to file an Arizona tax return (Pub 704).

If you have other Arizona income and are required to file (see Pub 704 for filing thresholds) then your military pay will automatically deducted.

Please ensure that you are indicated in TurboTax that you are military, otherwise it will not work:

The first is in the "My Info" section after you enter your name and occupation. You can click on "My Info" on the left and click on "Edit" next to your name. Scroll down to "I am a member or former member of the U.S. Armed Forces (active, reserve or National Guard)." Turbo Tax will ask follow-up questions.
The second is on the "Do any of these uncommon situations apply to this W-2?" screen after you enter your W-2, you can check the active-duty military box for the W-2.

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richardkeeme

On AZ State shows monies due but in the National Guard in Arizona active all year long. I followed the edit on My Personal Info and Made changes. Still the same. Also on going with the State, it shows "Other Nonrefundable Credits" and Has the box checked, "I donated to the Military Family Relief Fund, Form 340" and i can't uncheck it. Once it goes to continue, to the end, it shows Tax Credits of 40, and Other Items Contributions 100, and it seems it is from this? It shows i owe 100 to the state of AZ. And should be zero.

DMarkM1

You are correct your military pay is not taxable to AZ. You should revisit the "Wages & Income" tab. "Edit" your military W2 and continue through the page titled " Let's check for uncommon situations". There be sure to check the "Active Duty Military Pay" box. This will trigger the deduction on the AZ state form.

Next, revisit the AZ state interview. Continue through the interview. You will see the military deduction page to confirm.
Continue through the interview and leave the check box filled for the "other non-refundable credit"
Go through and delete/blank out all the boxes in the section to be sure no stray marks/spaces exist and put zeroes where required.
Go back to the "other non-refundable credits" page and uncheck the box now.

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