I'm a military spouse living in HI but home state is CT. My W2 has box 15 filled in for HI. How do I enter to make sure I am not having to pay more than I should?

[neysa-demchak]

I am a military spouse who is trying to file jointly with my husband. We are currently in HI due to him being stationed here but our home of residence is CT. When we enter in my W2, the box 15 says HI but no taxes have been taken out during the year. If I enter it in, it is stating I owe for CT and HI. I know I should not be having to pay state taxes due to me being a military spouse. How do I properly enter the information to ensure I am not paying extra with my taxes? Am i to leave box 15 blank? Or what do I do so that my exemption is being properly added in?

[ToddL · Accepted solution]

Since both you and your husband's state of residence is CT, you are not subject to HI tax. That is probably why no HI tax was withheld.

You are, however, subject to CT income tax.

Check your responses to the Personal Interview questions about your state of residence, whether you lived in another state, and whether you earned money in another state.

Spouses of active-duty military are considered to live in their state HOR no matter where they are stationed. Their local pay is considered to be earned in their state HOR. 

In the Personal Interview:

1. Select CT as your "State of residence".

2. Do not select "Lived in another state in 2016". That question only applies if you changed your state of residence in 2016. 

3.  Do not answer "Yes' to the question "Did you earn money in any other states?"

Make sure you complete the CT state interview in TurboTax and update this post with a "comment" if you have additional questions 

[neysa-demchak]

Do I still enter HI for box 15 when entering the w2? Because that's box is filled out for my w2 and that is all? Thank you for the response. It's been very helpful.

[ToddL]

Yes, but it shouldn't have any effect on your tax return. If it causes a problem, you can delete that entry.
BTW, my #3 son is active-duty in HI, and his wife is a Texas resident.

[neysa-demchak]

Thank you! This is very helpful. One more thing, when I am selecting that we have income outside of the military income, do I put the state as the permanent residence?

[ToddL]

Your state of residence and does not change when you have non-military income. If the military member had non-military income, he/she would answer "Yes" when asked  "Did you make money in another state?",  The spouse of the military member continues to have his/her same state of residence, and answers "No" when asked  "Did you make money in another state?"