Transitioning from Active to Reserve and changing residency

[Knoxgirl9k]

My husband has been active military, so we’ve been living in AK since we got married but are residents of NY and ME. He transitioned from active duty to reserves in November 2025 and we moved to ME—and he changed his residency to ME at that time. 
So he only earned about $350 from the military as a Maine resident in 2025, but do I still need to divide the income between the state returns? And if so, how would I go about that, since it’s all just lumped together on his W-2?

Also—I’m assuming his ME income and anything I made in 2025 will go on the same state return, I don’t need to separate them somehow, do I? We’re filing jointly. First time doing taxes as residents of the same state! 😅

[DaveF1006]

Yes, you need to divide the income between New York and Maine.  Since you and your husband moved during the year, you’re both considered part-year residents in each state.

• New York: Wants to tax the income earned while you were NY residents (Jan – Oct).
• Maine: Wants to tax the income earned while you were ME residents (Nov – Dec).

Your W-2 shows the full year’s total, so you’ll need to split it up based on when the transition happened.

• Look at his final Active Duty Leave and Earnings Statement (LES) from November 2025. That will show his year-to-date (YTD) earnings up to the point he left active duty.
• The YTD amount from that LES is generally what you’ll report to New York. The remaining amount (the $350 earned as a reservist) is what you’ll report to Maine.

Since you are filing jointly federally, you will also file jointly for both states. For this, you will need to file the NY State return first and then you will file. a Maine return last. For each state, you will file a NR/Part-Year resident return. For each, I will give you a brief idea where the allocations screens will occur in your return.

For the New York State return: 

After you start the New York state return and confirm your dates of residency, look for these steps: 

1. State Taxes > New York > Income > Wage Allocation. 
2. You will see a screen titled "New York Income Allocation." As you progress through your NY State interview.
3. What to do:

• It will ask: "Were all of your wages earned in New York State?" Select NO.
• It will show your W-2s. Click Edit next to each one.
• Choose the method "Allocate by Manual Entry" (or "Specific Amount").
• The Data: Enter the Year-to-Date amount from your husband's November LES (his active duty pay) in the "New York Amount" box. Leave the $350 out. For your income, enter only what you earned while the two of you were NY residents.

For the Maine Return:

Maine handles this near the end of the Maine interview. It calculates tax on your total income first, then asks you to "pull out" the income that isn't Maine's.

1. The Path: State Taxes > Maine > Income > Wages and Salaries.
2. The Screen: Look for a screen titled "Maine Income Allocation" or "Nonresident Credit / Schedule NR."

• It will present a list of your federal income sources.
• In the "Maine Source Income" column, you will enter $350 for your husband. For your income, enter only the wages you earned from the day you moved to Maine through Dec 31.
• TurboTax will use this to generate Schedule NR, which ensures Maine only taxes you on that small amount of income.