Good afternoon, I am active duty with a state residence of AZ stationed in North Carolina. Filing states showing I owe both NC and AZ. How do I file to not owe?

[ToddL · Accepted solution]

Active-duty military are considered to live in their state HOR no matter where they are stationed. Their active-duty pay is considered to be earned in their state HOR. 

Your DFAS W-2 should have AZ as your "tax state" (boxes 15-17), and you would file a AZ return. The only reason you would file a NC return would be if you had non-military income from NC.

When you complete the Personal Interview:

1. Select Arizona as your state of residence on December 31, 2016;
2. Answer "No" when asked if you "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 you "Earned money in another state?", unless you had non-military income in NC.

[ghosch171]

I absolutely appreciated this.  Thank you for the help!

[ToddL]

My pleasure!