Active Duty OK Home of Record; Civilian wife is a NE resident and we're stationed in NE. OK says I owe taxes.

[jtehfreaks]

I am an active duty member who has had Oklahoma as my Home of Record for my entire career and have never had to pay OK state taxes. I've been stationed in Nebraska twice now and was recently married; we're filing our federal taxes jointly. For OK state taxes, based on the options, I chose the "One spouse resident/one part-time or nonresident".

My wife has never lived in OK, and her job is here in NE. When I enter the total amount of money earned in OK (my pay), I still end up showing that I owe $352, even though all of that income from OK should be tax free. Does anyone know what's going on here? Is the site calculating all of my wife's NE income for taxes owed in a state she has zero affiliation with?

[TomD8]

See Filing Status on page 8 of the Oklahoma tax instructions to see what the options are in your situation:

https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/individuals/current/511-Pkt.pdf

Per Section 302 of the VBTA act of 2018, your wife also has the option of filing as a resident of your SLR/HOR (Oklahoma).  If she were to choose to do that, then her income would be taxable by Oklahoma, but not by Nebraska.

The VBTA Act permits the civilian spouse of an active duty military servicemember to file state taxes as a resident of her servicemember spouse's SLR.  This is an option, not a requirement.  She can still file a resident Nebraska return if she prefers.

https://www.congress.gov/115/plaws/publ407/PLAW-115publ407.pdf