Your spouse has the option of selecting North Carolina as his/her resident state for tax filing purposes.
“The Military Spouses Residency Relief Act allows military spouses to declare the same state of lega...
If he/she declares North Carolina as their resident state for tax purposes, they would file a non-resident CA return to have the CA state tax withheld refunded. Next you would file a joint NC return and claim all income.
If they decide to stay a California Resident for tax purposes, you would need to file a Married Filing Separate North Carolina return and claim only your income.
According to the State of North Carolina:
“North Carolina requires that you use the same filing status as you used on your federal return. An exception for married couples is if one spouse is a resident of North Carolina and the other is a nonresident (and had no NC taxable income), you may use the filing status for Married Filing Separately.”
“If you file married filing separate state returns but filed a married filing joint federal return, e-file the federal return and wait for the return to be accepted. Then, complete a federal return using the married filing separate status. Do not file the second federal return. Attach copies of both the married filing joint federal return and the married filing separate federal return to the printed North Carolina return. You cannot e-file the North Carolina return.”
More information for military members filing a North Carolina Return
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