Question

I owe Hawaii a large amount. I’m a military spouse with a NC license. I just work in Hawaii due to military orders.

Forum|Forum|5 years ago
June 13, 2020
2 replies
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TurboTax Deluxe Online

According to the Veterans Benefits and Transitions Act, which became law in December 2018, the spouse of an active duty servicemember may now elect to have the same residence for state and local tax purposes as the servicemember. That means that you may choose to file either as a resident of your own home state, or as a resident of the state that is your spouse's military State of Residence (his SLR/HOR). In other words, if you are in Hawaii solely due to military orders, and Hawaii is not your or your spouse's State of Legal Residence, you do not have to file a Hawaii tax return.

https://www.jag.navy.mil/legal_services/documents/Info_Paper_2018_SCRA_Amendments.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Carl11_2

YOu need to contact base legal ASAP, since it will be free for you. If your SLR taxes your earned income *AND* you pay taxes on that earned income to your SLR, then you fall under MSRRA and don't have to pay "any" HI state taxes. But you will pay taxes to your home state on that income. Of course, this is only benificial if your home state taxes your income at a lower rate. However, if your home state does not tax personal income then MSRRA does not apply and you *will* pay state taxes to HI on your hawaii earned income. See https://files.hawaii.gov/tax/legal/tir/tir10-01.pdf

T

TomD8

The reference in @Carl11_2 ‘s reply is from 2010 and is superseded by the VBTA law of 2018. As of tax year 2018, the spouse of an active duty service member is free to file his/her state and local tax return in either his/her own domiciliary state, or in his/her active duty servicemember spouse’s SLR/HOR state.

See this Tax Announcement from Hawaii: http://files.hawaii.gov/tax/news/announce/ann19-01.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Carl11_2

There are still certain actions you need to take in order get back any state taxes already withheld by your HI employer in 2019. So weather you have choice or not is irrelevant at this point. You "need" base legal to walk you through the procedure to get your HI state taxes withheld in 2019, as well as those already withheld for 2020, refunded to you.

Then there's specific paperwork you need to do with the state and your employer, so that taxes will be withheld for whatever you claim as your home state. Base legal is "the" "most" current source of information on this, as well as the exact procedures you need to follow, and filings you need to make. Things "can" vary based on who your employer was in 2019.

For example, if you worked for a local business such as Taco Bell or something like that, what you have to do is different than if you worked in housekeeping up an Tripler AMC (which is unionized, and it affects your financial/membership relations with the IBT Union.) So more than just IRS/State rules and laws can come into play here.