I am a military spouse, we are currently stationed in VA. Our HOR is in CA. I did some Independent Contract work during the year in VA, totaling under $3k. We file the CA return each year, but I'm being prompted by Turbotax that I need to file separately in VA. This doesn't feel accurate.
Do I need to file state taxes for VA? Or just in CA?
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It depends on the kind of self-employment you had in Virginia if your self-employment income is taxable in VA and you have to file a VA state tax return.
From VA Tax Military Spouses FAQ:
A spouse's income from self-employment may or may not qualify for the exemption, depending on the type of business in which the spouse is engaged.
Income you earn from self-employment is exempt from Virginia income tax if the primary source of income from your business is derived from your performance of a service. If your business employs others and/or utilizes significant capital (equipment, vehicles, etc.), then the income you derive from the business will not be exempt from Virginia income tax. For additional information, see Tax Bulletin 10-1.
It is online tutoring income.
I'm being prompted that I need to file a resident tax return for VA via turbotax, which I know it's not correct. When I try and select that we need a nonresident return, it's showing that I need to file a married file separate return, which also doesn't seem correct.
Do I need to file considering I only made under $3k?
No, you don't need to file a VA state tax return.
Online tutoring is a performance of service therefore your self-employment is exempt from Virginia income tax as a military spouse but you will have to include the on your CA tax return.
Also, you are under the VA filing threshold. Please see Who must file a VA tax return for additional details.
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