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State tax filing
@TurboTaxToddL I followed those steps originally- however the law doesn't help with that situation. From Turbo Tax's Website:
"If you reacquired Colorado residency during 2016 or 2017, you are eligible to subtract an amount up to your total federal taxable active duty military pay. To reacquire residency, you must have evidence of an intent to make Colorado your state of legal residence. You must also have evidence that after enlisting in the military you acquired legal residency in a state other than Colorado."
And from Colorado's Website: (<a rel="nofollow" target="_blank" href="https://www.colorado.gov/pacific/sites/default/files/Income21.pdf">https://www.colorado.gov/pacific/...>)
"REACQUISITION OF RESIDENCY DURING ACTIVE MILITARY SERVICE
Beginning on or after January 1, 2016, an active duty service member whose home of record is Colorado and whose state of
legal residency is any state other than Colorado may reacquire legal residence in Colorado if at least one of the following
five criteria are met. "Home of record" is the place one was living when they entered or re-enlisted in the military. An
individual must:
? Register to vote in Colorado,
? Purchase residential property or an unimproved residential lot in Colorado,
? Title and register a motor vehicle in the state,
? Notify the state of the individual’s previous legal residence and the intent to make Colorado the individual’s state
of legal residence, or
? Prepare a new last will and testament that indicates Colorado as the individual’s state of legal residence.
For the tax year that begins on January 1, 2016, and for subsequent tax years, an active duty service member who has
reacquired residency in Colorado may:
? Claim a subtraction on the Colorado individual income tax return of an amount equal to any compensation received
for active duty service in the armed forces, to the extent that the compensation is included in federal taxable
income,
? Not file an individual income tax return with the State of Colorado if the individual’s only source of income is
compensation that is subtracted from federal taxable income, and
? Elect not to deduct or withhold taxes from the individual’s wages if the individual’s withholding certificate
indicates that the compensation is eligible to be subtracted from the Colorado income tax return."
Following the steps you listed above I would miss out on the approximately $1900 of Colorado State income taxes I paid to Colorado during 2017- which, according to the Colorado Honoring Our Military Exemption (H.O.M.E) Act, or House Bill 15-1181 from the General Assembly of the State of Colorado, I should not be paying, or I should get a refund for approximately $1900 from the State of Colorado once my tax return is filed.
This law was designed to target those military service members who changed their Colorado residency to states such as Texas and Florida because they do not charge service members income tax (while those service members were stationed in those states). As such- it makes financial sense for a service member like me, who lives and is stationed in North Carolina, to change my state of legal residency from Colorado to North Carolina to Colorado because then I would not be charged income state taxes.
If I was stationed in Florida or Texas I would've already changed my state of legal residency from Colorado to Texas or Florida precisely because I wouldn't be paying state income taxes. However, I am stationed in North Carolina, where the effective tax rate for military members is higher than Colorado. I'm simply attempting to follow the rules set forth by "Income 21 Military Service Members" that identifies what "REACQUISITION OF RESIDENCY DURING ACTIVE MILITARY SERVICE" is.
According to some states- legal residency is defined by spending approximately 181 days in the state, or having cars registered in that state (those are a few examples). By that measure- I am a legal resident of North Carolina. However, by my Leave and Earnings Statement, I am a Colorado resident who pays Colorado state income taxes.
How do I proceed?
"If you reacquired Colorado residency during 2016 or 2017, you are eligible to subtract an amount up to your total federal taxable active duty military pay. To reacquire residency, you must have evidence of an intent to make Colorado your state of legal residence. You must also have evidence that after enlisting in the military you acquired legal residency in a state other than Colorado."
And from Colorado's Website: (<a rel="nofollow" target="_blank" href="https://www.colorado.gov/pacific/sites/default/files/Income21.pdf">https://www.colorado.gov/pacific/...>)
"REACQUISITION OF RESIDENCY DURING ACTIVE MILITARY SERVICE
Beginning on or after January 1, 2016, an active duty service member whose home of record is Colorado and whose state of
legal residency is any state other than Colorado may reacquire legal residence in Colorado if at least one of the following
five criteria are met. "Home of record" is the place one was living when they entered or re-enlisted in the military. An
individual must:
? Register to vote in Colorado,
? Purchase residential property or an unimproved residential lot in Colorado,
? Title and register a motor vehicle in the state,
? Notify the state of the individual’s previous legal residence and the intent to make Colorado the individual’s state
of legal residence, or
? Prepare a new last will and testament that indicates Colorado as the individual’s state of legal residence.
For the tax year that begins on January 1, 2016, and for subsequent tax years, an active duty service member who has
reacquired residency in Colorado may:
? Claim a subtraction on the Colorado individual income tax return of an amount equal to any compensation received
for active duty service in the armed forces, to the extent that the compensation is included in federal taxable
income,
? Not file an individual income tax return with the State of Colorado if the individual’s only source of income is
compensation that is subtracted from federal taxable income, and
? Elect not to deduct or withhold taxes from the individual’s wages if the individual’s withholding certificate
indicates that the compensation is eligible to be subtracted from the Colorado income tax return."
Following the steps you listed above I would miss out on the approximately $1900 of Colorado State income taxes I paid to Colorado during 2017- which, according to the Colorado Honoring Our Military Exemption (H.O.M.E) Act, or House Bill 15-1181 from the General Assembly of the State of Colorado, I should not be paying, or I should get a refund for approximately $1900 from the State of Colorado once my tax return is filed.
This law was designed to target those military service members who changed their Colorado residency to states such as Texas and Florida because they do not charge service members income tax (while those service members were stationed in those states). As such- it makes financial sense for a service member like me, who lives and is stationed in North Carolina, to change my state of legal residency from Colorado to North Carolina to Colorado because then I would not be charged income state taxes.
If I was stationed in Florida or Texas I would've already changed my state of legal residency from Colorado to Texas or Florida precisely because I wouldn't be paying state income taxes. However, I am stationed in North Carolina, where the effective tax rate for military members is higher than Colorado. I'm simply attempting to follow the rules set forth by "Income 21 Military Service Members" that identifies what "REACQUISITION OF RESIDENCY DURING ACTIVE MILITARY SERVICE" is.
According to some states- legal residency is defined by spending approximately 181 days in the state, or having cars registered in that state (those are a few examples). By that measure- I am a legal resident of North Carolina. However, by my Leave and Earnings Statement, I am a Colorado resident who pays Colorado state income taxes.
How do I proceed?
May 31, 2019
10:40 PM
