Hawaii State tax / Nonresident

[Chenewm]

I started working on my tax and notice on the State tax it says I owe a HI State tax. I moved to Hawaii due to my husband got an order for a pcs assignment. While in Hawaii, I got a job at Spectrum. A friend of mine says I need to contact HR and let them know Im a nonresident and I qualified for the MSRRA. The HR did not ask me to submit any supporting docs and a few weeks later I don’t see any more State deductions on my payslip.

Fast forward to today. I found out I owe HI a State tax. Do I still need to file Hawaii State tax although my home of record is Texas?

[KrisD15]

You would not owe state tax if your Resident State (which is a little different than Home Of Record) is Texas. 

As the Spouse of a Military Member, you may choose the same state of residency as your Military spouse claims. 

If the Resident State for your Husband is Texas, you would not be liable for state income tax no matter where you earn that income. 

If State tax was withheld, you could file to get that tax refunded. If filing Jointly, be sure to select that one of you are active military and your state of residence is Texas in the TurboTax software. 

More Info

“Nonresident Spouse of a Servicemember. A nonresident spouse of a servicemember who is present in Hawaii solely to be with the servicemember serving in compliance with military or naval orders is not a Hawaii resident and will be treated as a nonresident unless the spouse establishes residence or domicile in Hawaii. A nonresident spouse of a servicemember is subject to Hawaii income tax on his or her Hawaii-sourced income. However, if the nonresident spouse satisfies the conditions prescribed under the SCRA (discussed in Part III of this TIR), then the nonresident spouse’s income from services performed in Hawaii is not considered Hawaii-sourced income and is not subject to Hawaii income tax or Hawaii withholding. If the nonresident spouse does not satisfy the conditions prescribed under the SCRA, then the nonresident spouse’s income from services performed in Hawaii is Hawaii-sourced income and is subject to Hawaii income tax and Hawaii withholding. A nonresident spouse with Hawaii sourced income is required to file Form N-15. A nonresident spouse with no Hawaii-sourced income is not required to file a Hawaii income tax return.” 

“Income received by the servicemember’s civilian spouse for services performed by the servicemember’s spouse in Hawaii is not considered Hawaii-sourced income and therefore, not subject to Hawaii income tax if all of the following conditions are met

1. The servicemember (as defined in 10 U.S.C. §101(a)(5)) is present in Hawaii solely in compliance with military or naval orders; 

2. The spouse is in Hawaii solely to be with the servicemember; and 

3. The spouse and servicemember are domiciled in the same state and that state is not Hawaii.”

[SteamTrain]

1)  First, in the MY Info section, make sure you've entered TX as your state of residence  (Not the mailing address....that can be in HI)

Then:

2)  What is probably happening in the HI tax return, is that you've been entering your W-2 with HI withholding, in the state area of the W-2, but you need to indicate a zero for the HI wages.   Beyond that, when you go thru the HI Non-resident tax return,....all HI income allocations should be zero.

[Cjtomp736]

Do I have to mail in my Hawaii state taxes if it is zero taken out. I'm a military spouse and use the same home of residency as my husband is Arizona. Just wondering if I have to mail it in to Hawaii or Arizona state showing zero taken out.

[SteamTrain]

If you filed the HI form HW-4 with that employer, indicating in the part 3 checkbox that you were a "Nonresident Military Spouse (not subject to withholding)",...then you shouldn't have to file HI at all. 

Just AZ.

AZ Pub 705 indicates the following:

Q13. If I am an Arizona resident who is living in another state solely to be with my active duty military member spouse, and I have a job in that state, what should I do if my employer will not agree to withhold Arizona income tax from my wages?"

"As an Arizona resident, your income earned in another state is subject to Arizona income tax. If your employer will not withhold Arizona income tax from your wages earned in another state, you may make voluntary estimated income tax payments to Arizona even though you may not be required to make estimated payments to Arizona. Use Form 140ES to make Arizona estimated income tax payments. Individuals that meet an income threshold ($150,000 for married taxpayers filing a joint return) are required to make Arizona estimated payments. For more information about Arizona estimated income tax payments, see Arizona Form 140ES."