Military Spouse State Residence

mkern-ny · ‎June 5, 2019

I am in the military and claim Kentucky as my residence. My Spouse's income was all from New York and state taxes were taken out. However with the new law that came into effect, can she claim Kentucky as her residence since I am in the military? Also does she have to file state returns in both Kentucky and NY?

I didn't see the new law update that was passed at the end of 2018 in turbo tax

DanaB · ‎June 5, 2019

Yes, you are correct the Veterans Benefits and Transition Act of 2018 became Public law on December 31, 2018, and would allow your spouse to claim Kentucky for tax purposes. Then her income from New York would be taxable in Kentucky. Yes, she would have to file as a resident for Kentucky and as a nonresident for New York.

Since the law was just passed at the end of 2018 it might take a while for some states to establish their procedures. Tax preparation software can only be updated after the States establish their procedures.

View solution in original post

DanaB · ‎June 5, 2019

Yes, you are correct the Veterans Benefits and Transition Act of 2018 became Public law on December 31, 2018, and would allow your spouse to claim Kentucky for tax purposes. Then her income from New York would be taxable in Kentucky. Yes, she would have to file as a resident for Kentucky and as a nonresident for New York.

Since the law was just passed at the end of 2018 it might take a while for some states to establish their procedures. Tax preparation software can only be updated after the States establish their procedures.