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Tax help for military filers
Assuming the SC spouse had SC taxes withheld then a part-year return will need to be filed in SC. Since SC law says whatever filing status you use on your federal return is the one you must use for SC, you have a couple of choices.
A. You can each file as Married Filing Separately (MFS) federally. Then the GA spouse would file GA full year resident separate return and the SC spouse would file a part-year separate return for SC and one for GA; each spouse with their own income/deductions. Remember if one spouse itemizes the other must also (even if one is below the standard deduction). Typically both spouses choose the standard deduction unless there are enough itemized deductions for both.
B. File as Married Filing Jointly (MFJ) federally and GA as residents and a SC non-resident (steps below). On the SC non-resident return you will be using your military status to exclude all your military pay from SC income. You would also allocate to SC only the SC spouses pay/income for the period prior to the marriage. The income taxed and the SC tax liability that will be used to claim a credit on your GA resident return.
In the GA resident return you would claim a credit for taxes paid to another state to mitigate the double taxation by your resident state (GA) on the income earned and taxed in SC.
- In the "My Info" section
- Indicate for both spouses that GA was the state of residence and that neither lived in another state
- Be sure the military status is indicated for the active duty military spouse
- Still in "My Info, scroll down to "Other State Income"
- Answer "Yes" you earned income in another state and select SC
- NOTE: If the military taxpayer earned income from a second job in VA or you or your spouse have income from sources other than for services performed in VA then VA will also need to be selected and a non-resident return filed there as well.
- Enter all income and deductions in the federal interview
- Be sure after entering the military W2 information to select "Active Military Pay" on the page asking about "Uncommon Situations". This will exclude the military pay from SC income.
- Now work the SC interview
- Select "Nonresident or part-year resident filing as nonresident"
- Select only the spouse that lived in SC
- Select "No" spouse does not qualify for Military Spouse Exclusion (This will will allow the allocation later)
- Make the income allocations when asked
- Complete the SC interview
- Finally work the GA resident interview
- Yes, GA residents all year
- Continue through to arrive at a page showing the SC income and tax
- Verify
- Credit will be applied
- Continue Ga interview
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