- quote -

Quite true. HOWEVER, please note that there is NO federal
law that determines the state income tax residence of
military service members, other than the Servicemembers'
Civil Relief Act. That law only restricts the ability of
the states to consider a member's domicile or residence to
have changed due to the member's presence in some other
location on permanent military orders.

SCRA does not restrict, in any way, the power of a state
where a military member was domiciled at the time he or she
entered the service to continue to treat that person as a
domiciliary and tax resident as long as he or she is on
active duty. Further, it does not in any way restrict a
state from considering a member to have changed his or her
domicile on the basis of actions OTHER THAN military duty
assignment.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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- quote -

I think Federal Law trumps state law wrt status of
military members.

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"scott s." <75270_3703a[at]csi.xcom> wrote:
- quote -

Scott, I wouldn't argue with your interpretation, although
I'm sure I did see something in the NJ RIA explanation about
a permanent home where the member intends to remain after
separation.

Nevertheless, the case described by the OP in this thread
does NOT meet the standards you cite. I quote from the
original post: "She has always lived on base."

The wife in the question that was asked remains a resident
of NJ for tax purposes, and is discriminated against in
precisely the way you describe.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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katiej_1958[at]yahoo.com (Katie Jaques) wrote in news:108h9kb7ku1j61

- quote -


Here is a cut/paste out of the nj web site:
http://www.state.nj.us/treasury/taxation/

"Military personnel who are domiciled in New Jersey, but who
meet all three of the following conditions for the entire
year, are considered nonresidents for income tax purposes:

1. You did not maintain a permanent home in New Jersey; and
2. You did maintain a permanent home outside of New Jersey; and
3. You did not spend more than thirty days in New Jersey
during the taxable year.

If you are a member of the Armed Forces whose home of record
(domicile) is New Jersey, you are not considered to be
maintaining a permanent home outside of New Jersey if you
are residing on shipboard or in barracks, billets, or
bachelor officer quarters. However, if you pay for and
maintain, either by out-of-pocket payments or forfeiture of
quarters allowance, an apartment or a home (either owned or
rented) outside New Jersey, such facilities constitute a
permanent home outside of New Jersey."

I note there is no item of intent to change domicile
involved. Legally, I imagine they are still domiciliaries,
but for the specific purpose of the income tax, have
non-resident treatment.

I submit that my reading is the common understanding of
military folks. If it's wrong, a lot of people are not
paying their taxes! I _can_ tell you that state tax
witholding by DFAS stopped being voluntary in the 70's or
early 80's, DFAS will withold. If you declare NY or NJ
domicile, DFAS will withold $0, if you sign a statement
confirming the 3 tests above.

As an aside, the "permanent residence" test tends to screw
the single, more junior service member, in favor of marrieds
and senior folks who are provided quarters, or allowance in
lieu of quarters.

scott s.

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"scott s." <75270_3703a[at]csi.xcom> wrote:
- quote -

I disagree. As I read the NJ law, she does not meet the
requirements to be considered a nonresident of NJ. Her
domicile remains there, because she has not established a
new domicile anywhere else. She does not maintain a
permanent place of abode outside NJ where she intends to
live after she separates from service. Therefore, the
military should be withholding NJ tax from her military
compensation.

The spouse should file a NJ resident return, probably MFS.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

The foregoing is intended for

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Chas Kendall <Chas_K[at]excite.com> wrote:
- quote -

Thanks for posting that link, which is very useful.
However, it is not totally accurate with respect to the
determination of state tax residence for military personnel.

In fact, each state defines a resident for tax purposes by
its own statutory rules. A tax resident is subject to tax
on all income, regardless of source; a nonresident is
taxable only on income from sources within the state. The
Service Members' Civil Relief Act prohibits states from
considering an active duty military member to have changed
domicile or residence solely by reason of being stationed
somewhere else on permanent military orders.

In most states, a person who is domiciled in the state is a
tax resident; however, many states provide for circumstances
under which a domiciliary may be a nonresident for tax
purposes. Domicile is a common-law concept, developed
through case law, and is generally described as a person's
true, fixed home and permanent establishment; the place
where an individual has established a home for self and
family with no present intention of removing therefrom; the
place to which, whenever absent, the individual intends to
return.

Domicile, once established, is generally maintained until a
new domicile is established at a different location. In
general, in order to establish a new domicile, an individual
must meet all of three requirements: (1) abandonment of the
previous domicile; (2) moving to and residing in a new
location; and (3) an intention to remain in the new location
permanently or indefinitely. A person who has abandoned his
previous domicile but has not moved to and resided in a new
location with the intention of remaining there has not,
under the standards applied by most states, made an
effective change of domicile.

Military home of record, as the web site you referenced
indicates, is simply the place to which the military
promises to pay your way when you separate from service.
Generally, though, it is the domicile of the member at the
time he or she enters the service. States generally use
home of record as a convenient proxy for domicile in the
absence of any action by the member to establish a new
domicile elsewhere, although the facts of an individual
case, if thoroughly examined, might result in a different
conclusion. So home of record is not irrelevant to the
determination of state tax residence.

A military member may, as the web site states, complete a
"State of Legal Residence Certificate" as permitted by the
local base legal or finance office. Completion of this form
authorizes the military to withhold state income taxes from
the member's pay for that state, and to cease withholding
for the home-of-record or other previously designated state.
However, and this is really important, the fact that the
military service allows the member to make that change does
not NECESSARILY constitute a valid change of domicile or
residence for state income tax purposes. All it does is
change the state that gets (or is entitled to, by the DOD's
lights) the member's state income tax withholding. Unless
the member has met ALL THREE of the requirements for change
of domicile, the state where the member was previously
domiciled may consider that no change has occurred. If it
is one of the "grabby" states that tax all of a domiciliary
member's income, it may continue to do so. It is not within
the power of the Department of Defense to determine a
military member's domicile for state income tax purposes.
That determination is made under the laws of each individual
state, by the state's tax authority and courts.

Again, as a practical matter, states generally will use the
legal residence certificate as a convenient proxy for
domicile and ask no further questions. However, if a member
started out from a grabby state like Georgia or Wisconsin,
which tax domiciliary members' total income including
military compensation, and persuaded the service to allow
him to file a legal residence certificate for Texas or
Nevada, he or she should not be surprised if the original
state asks some questions.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"Chas Kendall" <Chas_K[at]excite.com> wrote:
- quote -

Correct. Home of Record is where you want to declare as your
"hometown". The state of Legal residence for tax and voting
can and usually is different than the HOR.

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Chas_K[at]excite.com (Charlie48K) wrote in news:1085drjqf87be64

- quote -

This can be a confusing topic. Especially the term "home of
record" as contrasted to "domicile".

New Jersey has information here:

http://www.state.nj.us/treasury/taxa...gi-ee/git7.pdf

that defines these terms with respect to state income taxation.
Here is the text on "home of record":

Home of Record is the place that is used for
fixing travel and transportation allowances.
Your "home of record" should not be confused
with your domicile, even though they may be
the same in certain circumstances.

New Jersey and New York state have similar systems in that
if you are in the military, spend less than 30 days per year
in state, and maintain a dwelling (not a ship or barracks)
outside the state, you are not liable for resident income
tax.

A more difficult question usually is filing status: can
federal MFJ filers file as MFS for state income tax? It
appears that in this situation (one spouse NJ resident, one
spouse NJ non-resident) the NJ resident spouse can file MFS.
So in this case, I don't think the spouse even needs to
file in NJ, unless the spouse has some NJ source income.
Note that states tend to be "helpful" and allow filing MFJ,
but then you have to include all-source income of the
non-resident spouse!

Also, if member's state of domicile is reported to DFAS as
NJ, they should not be witholding state income tax, as long
as the member is not assigned a permanent duty station in
NJ. That should be shown on the member's JUMPS pay reports
(or they can establish online access to their pay record at
DFAS.gov).

AFAIK, in no jursidiction does getting married force the
woman, or either spouse for that matter, to change domicile.

scott s.

Not a tax-person, but formerly part of a dual-military
couple domiciled in NY.

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Cindy, CA wrote:
- quote -

Does not matter where you live if you are Active Duty.

- quote -

No. Home of Record has nothing to do with legal residence
for voting or tax filing. Read this:

http://usmilitary.about.com/cs/milit...meofrecord.htm

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pattymaci[at]aol.com (PattymacI) wrote:

- quote -

New Jersey is her home of record and her resident state for
tax purposes under the federal law that apples to the
military until she intentionally changes her legal
residency. She is a New Jersey resident for state tax
purposes. I believe new Jersey exempts her military pay from
taxes in these circumstances too. You might also want to
show her this regarding her foreign pay in Italy.

http://www.fvap.gov/pubs/vag/pdfvag/appendix_e.pdf

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PattymacI wrote:

- quote -

What is her home of record with the military? Unless and
until she changes her home of record with the service, she
remains a resident of the state where she entered the
service. In this case, that appears to be NJ. If she wants
to file a joint state return, she can have the personnel
branch change her records to show MA as her home of record.

The military payroll system is programmed to withhold state
taxes, if any, based on the personnel records. She cannot
be required to pay state income tax on her military pay by
any state EXCEPT her home of record.

Lanny K. Williams, CPA
Nawarat, Williams & Co.
Income Tax Services for Expatriate Americans

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pattymaci[at]aol.com (PattymacI) wrote:

- quote -

Most Active Duty members keep a Home of Record in a no-tax state...

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Both spouses have been in the military since 2000.
They were married in December, 2003 while on vacation
in Mass. They filed a joint federal return for 2003
with the husband's address in Italy.

Husband is stationed in Italy. He has a driver's license
from Mass and is a registered voter in Mass. He filed a
married filing separate Mass 2003 return. He could not
file joint with his wife because she never lived in Mass.

Wife entered military from NJ. She has been stationed in
VA since 2000. She has always lived on base. No driver's
license and not a registered voter anywhere. She will be
sent to Italy next month. The couple will make their home
in Mass when they get out of the military in 2006.

What state return does the wife file for 2003?

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