Will i exempt from paying NY state taxes because I am active duty military station overseas. I filed NY non-resident return but it still says I owe $1,692. what do I do?

[KittyM · Accepted solution]

You are correct in filing a Non-Resident New York state tax return if you are active duty military but not living in the State of New York during 2017.  There is only one New York exemption for military pay, from New York Publication 361 linked below:

"Any income received by a member of the armed services of the United States for service in an area designated as a combat zone is exempt from New York State, New York City, and Yonkers taxes. If you included any combat zone pay in your federal adjusted gross income, you are entitled to a New York subtraction modification for that income in computing your New York adjusted gross income." 

 https://www.tax.ny.gov/pdf/publications/income/2009/pub361.pdf

[rdowillis]

I am a bit confused with .  On page 14 of Pub 361, it appears you are able to exclude all military pay from NY State taxes if the following three conditions are met:

If your domicile was New York State when you entered the military and:
• You meet all three conditions in Group A (see page 5) for the tax
year, you will be treated as a New York State nonresident for the
full tax year.
You may claim a refund of any New York State income tax
withheld from your military pay by filing Form IT-203 with the
department. You must include an explanation that contains all of
the following:
1. a statement that you did not have a permanent place of abode
in New York State during the tax year;
2. the location and a brief description of the permanent place of
abode you maintained outside New York State, and the
beginning and ending dates of your stay there; and
3. the exact number of days you were in New York State during
the tax year.