PA Military PPM tax exempt

[user17686093553]

Have always been a PA resident but was PCS’d elsewhere for over a year for military training. PCS’d back to PA this past tax season and I’m wondering if my PPM payout is state tax exempt. I know military income earned out of the state is PA tax exempt, but can’t find any guidance on if this PPM payout would be considered earned out of the state.

[AmyC]

It depends. PA military pay states:

Military pay (including compensation for weekend drills) earned within and outside Pennsylvania by PA residents is subject to PA personal income tax as compensation.

Income received by a PA resident for all military service performed inside Pennsylvania – even if on federal active duty or federal active duty for training – is fully taxable, unless for active military duty within PA for an emergency pursuant to 35 PA C.S. Ch. 76.

Military pay received while on federal active duty or federal active duty for training outside Pennsylvania is not taxable.