Does my nonmilitary spouse income earned in MN get taxed in New York State or not?

[robrileyw42]

I'm active duty military currently stationed in Minnesota, however my home of record is New York. Both the Wife and myself will use New York as our state of residence. Technically, we fall under the nonresident category for NY state and my military income is tax exempt (this I know for sure). My question is whether my nonmilitary spouse's income in Minnesota would be taxed in New York State? All the guidance I see says along the lines that with us being nonresidents, only New York sourced income would be taxed...Could you please help me figure this out before I file, I would greatly appreciate it!

[DMarkM1 · Accepted solution]

Assuming you and your non-military spouse meet the exception rules for Group A (see below) from the NY Department of Revenue definition of "Resident" (here), then neither of you are NY residents for NY tax purposes.  Her MN income is not NY taxed.  You would not need to file  a NY tax return. 

Further, under the Military Spouse Residency Relief Act her income would also not be taxed by MN as she is considered a NY resident for MN tax purposes.  The same is true for your military pay.  

1. You did not maintain any permanent place of abode in New York State during the tax year; and
2. You maintained a permanent place of abode outside New York State during the entire tax year; and
3. You spent 30 days or less (a part of a day is a day for this purpose) in New York State during the tax year.