Some factors to
Ramstein Law Center
Home may be where the heart is, but an Airman’s state of legal residence is a little more complicated.
For servicemembers who are constantly on the move, knowing and declaring a domicile, or state of legal residence, is important, especially now as questions arise about state tax filing obligations for the 2006 tax filing season.
“Your state of legal residence is one of the key factors in determining, among other things, your liability for state income taxes, eligibility for in-state tuition rates, eligibility for voting in state and federal elections and where your will is probated,” said Capt. Gabriel Young, Ramstein Law Center assistant staff judge advocate.
It’s easy to be confused, Captain Young said. Residency is where a servicemember currently lives. But state of legal residence is the place where a servicemember intends to return after all the temporary residences, Captain Young said.
For example, an Airman with a state of legal residence in Oregon leaves on military orders but intends to go back to Oregon. The Airman may never be stationed in Oregon, but Oregon remains the Airman’s state of legal residence, Captain Young said. And according to the Servicemembers Civil Relief Act, servicemembers do not have to change their state of legal residence just because they change duty stations.
“The Servicemembers Civil Relief Act protects an active duty member’s pay from being taxed by any state other than the military member’s state of domicile,” Captain Young said.
Airmen can change their state of legal residence, Captain Young said. But, he or she must be in the state they wish to declare as their new state of legal residence and must intend to return to that state.
Some people think that while stationed overseas, they are not a legal resident of any state, thereby not mandated to file state income tax, said Anita Ackerman, Ramstein tax advisor. There could be no bigger misconception.
“If you are a U.S. citizen, you are a legal resident of one of the 50 states and you are required to meet the tax requirements of that state,” Ms. Ackerman said.
What makes the issue confusing, is that in the military community, married couples are often legal residents of different states, Ms. Ackerman said. The military member’s state of legal residence might not change from move to move, however, a working civilian spouse is required to pay state income tax in the state where he or she worked. And every state is different.
Servicemembers and their spouses who are not properly filing state income taxes could be penalized later, Ms. Ackerman said.
Servicemembers and their spouses should contact the law center to find out the tax filing requirements, even if the spouse is in Germany and not working, Ackerman said.
“I would rather help in the beginning with questions than when a servicemember has a big tax bill two years from now,” Ms. Ackerman said.