My son is in the Military. His legal residence is CA (state he entered military). In 2018 his permanent duty station was South Carolina. Does he file in CA? If so, what income does he claim? The way I am reading it is that he doesn't claim any income in CA for active duty military pay. Does he have to file in SC?
Let me answer each question separately.
Does he file for California? It depends. California does not tax military income for an individual stationed outside of California. If all of his income is active duty received while stationed outside of California, he would not have to file a California return unless California tax is withheld from the income. Then he files to get taxes refunded to him.
Does he file for South Carolina? If his only income is active-duty, no. South Carolina cannot tax his active-duty income because his SLR is not South Carolina.
If he has income in South Carolina that is not active duty, then he would be required to file two returns: a SC nonresident return, and a California resident return to report the non-military income.
Usually the two places that need to be checked in this situation are "My Info" for correct residence information and W2 entries to ensure the the income is marked as "Active Duty Military". You should also go back through the CA return to be sure all "military: questions are answered.
First check the residence entries.
1. Click "My Info" on the left hand menu
2. Click Edit on right hand side of name
3. Be sure "Military or Former Military" is selected
4. Be sure CA is the resident state
5. Be sure all the military questions are answered; Continue
6. Scroll down to "other state income" and Edit
7. Enter SC as state you were stationed in
8. Look over the list of income types and answer "yes" or "no"
9 Continue as needed
Then check the W2 entries.
1. Click Federal in left hand menu
2. Click "Income & Expenses" tab at top of page
3. Scroll down to "Job W2" area Edit
4. Edit the applicable W2
5. Be sure all entries are correct
6. Be sure the "Active Duty Military Pay" button is selected on the follow on pages
Once you "Wrap up Income" then continue to the state returns.
1. Click "State" in left hand menu
2 Click "Prepare State" at top of page
3. Continue CA
4. Be sure to answer all the military questions
When you get to the CA summary page you will see the "Military Pay" subtraction.