Active Duty Military, spouse covered by MSRRA, both TX residents stationed in VA. How do we differentiate her income and my second income on VA state return? Her income is covered under MSRRA, my second income is not.

[DS30 · Accepted solution]

Yes, you will just file a nonresident VA state income tax return to report your nonmilitary VA-source income only. Just make sure that when you are doing the nonresident allocation for VA that you do not include her income (regardless if it was earned while stationed in VA).

Since you are both considered residents of TX (under the  MSRRA ) then no additional state income tax filing is necessary.