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posted Jun 4, 2019 7:21:37 PM

I live in MD and drill for the National Guard in Delaware. Do I have to pay state income tax for both states in this income?

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6 Replies
Level 15
Jun 4, 2019 7:21:39 PM

Not unless your military W-2 shows state income taxes withheld for Delaware, which it should not.  You should only be filing a Maryland resident state tax return.

Level 15
Jun 4, 2019 7:21:40 PM

If you live in Maryland and work in Delaware, you must file tax returns with both states. To avoid dual taxation, you can get a credit for taxes paid to Delaware by completing Maryland Form 502CR and filing it with your Maryland income tax return. Be sure to include a copy of your Delaware return.

 For more information about the tax situation for commuters, see Maryland Residents Who Work in Another State.

Level 15
Jun 4, 2019 7:21:41 PM

I'm thinking this is more in line with being active military where you do not report working in another state or earning income in another state since this a National Guard drill.

Level 15
Jun 4, 2019 7:21:43 PM

Nahhhhh...have to keep in mind that National Guard members, and even Military Reserve units will file taxes between states as any normal civilian.  Only if they get activated to full active duty does their state get locked in.

Reciprocal state tax agreements would still apply, but MD/Del don't have one.  Not sure if there might be any state exemptions for NG pay in either state.

Level 15
Jun 4, 2019 7:21:44 PM

Ok..Don't seem right that they should be treated any different from regular military since they are on duty.  But see what you mean concerning activation.  Thanks

Level 15
Jun 4, 2019 7:21:45 PM

I'm sure I saw a better reference than this one  (way down the page)....but not really a tax site:

" or you live and work full time in one state and are in a Guard or Reserve unit in the other – then you will typically need to file two state individual income tax returns."

<a rel="nofollow" target="_blank" href="http://www.militaryauthority.com/benefits/finance/taxes/paying-taxes-when-you-live-or-work-in-more-than-one-state.html">http://www.militaryauthority.com/benefits/finance/taxes/paying-taxes-when-you-live-or-work-in-more-than-one-state.html</a>