When you complete the Personal Interview:
-
Select OR as your state of residence (both of you);
-
Answer "No" when asked if you "Lived in another state in 2017?" That question only applies if you changed your state of residence in 2017.
- When asked if you "Earned money in another state?", answer "No" (unless the military member had non-military income in the state where you are stationed).
If you entered the military from Oregon, your state of legal residence (HOR) continues to be Oregon no matter where you are stationed. It should appear in Boxes 15-17 of your DFAS W-2.
As a
residents of OR, you are subject to OR state income tax, must file a OR tax
return, and pay OR taxes (when applicable- see below).
Oregon allows its residents to exempt their military pay from OR tax if they are stationed outside OR for the entire year.They have a similar tax break for military spouses. See Oregon
Department of Revenue / Programs / Individuals / Military personnel
Military pay subtractionsYou may qualify for more than one of the subtractions below if your federal adjusted gross income (AGI) includes military pay. Military pay is: active duty pay; reenlistment bonuses; and pay for guard and reserve annual training, weekend drills, and inactive duty training.
- Stationed outside Oregon—For military pay earned while stationed anywhere outside Oregon.
- Guard and reserve away from home—For military pay earned by National Guard members or reservists assigned away from home 21 days or more.
- Other military pay—For any remaining taxable military pay after taking the above subtractions, up to $6,000.
Your total subtraction can't be more than the total military pay included in federal AGI. Military pay not included in federal AGI isn't taxed by Oregon and can't be subtracted.
Oregon resident spouse living outside of OregonDo you qualify to be treated as a nonresident because you meet the special case Oregon resident requirements? If so, you aren't taxed on your out-of-state wages or self-employment income, even if the other state can't tax you because of the federal Military Spouse Residency Relief Act. You don't have to file unless you had Oregon tax withheld or other Oregon source income, such as rental income or retirement pay. If you file, use Form OR-40-N.
