My husband is active military and is tax exempt from his residency state NY. How do we fill in that it shows NY as its residency and does not calculate state taxes?

[ToddL]

When you complete the Personal Interview:

1. Select New York as his state of residence on December 31, 2016;
2. Answer "No" when asked if he "Lived in another state in 2016?" That question only applies if you changed your state of residence in 2016.
3. Answer "No" when asked if he "Earned money in another state?", unless he had non-military income from CA.

He will still have to prepare and file a New York tax return. The interview will ask specific questions to determine if he is exempt from NY tax on his military income - it is not automatic. See Publication 361, New York State Income Tax Information for Military Personnel and Veterans

Is my military pay subject to New York State and City income taxes?

• If you are a New York State resident and your permanent home (domicile) was in New York State when you entered the military but you were assigned to duty outside the state, you are still a New York State resident. Your military pay is subject to New York State income tax to the same extent it is subject to federal income tax.
  • If you are a New York State resident required to file a return, use Form IT-201, Resident Income Tax Return.
• If your permanent home (domicile) was in New York State when you entered the military but you meet the conditions for nonresident status, your military pay is not subject to New York State income tax.
• See Publication 361, New York State Income Tax Information for Military Personnel and Veterans, for an explanation of the conditions you must meet to be considered a nonresident for income tax purposes.
• If you meet the conditions for nonresident status, and are required to file a New York State income tax return, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return.
• If your permanent home was not New York State when you entered the military but you were assigned to duty in New York State, you do not become a New York State resident even if you have a permanent place of abode here. You are a nonresident and your military pay is not subject to New York State income tax.
  • If you are a nonresident and are required to file a New York State income tax return, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return.

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