Multiple State Filing

[bsparenborg]

I am in the military stationed in Virginia.  I claim Indiana as my home and have Indiana taxes taken from my pay.  My wife is not military and claims Virginia as her home state and works and has non military income from that state.  Do need to file "married but filing separate", how do we handle this for the states ? the federal is easy.

[JamesG1 · Accepted solution]

Under the Military Spouse Residency Relief Act, the nonmilitary spouse may use their military spouse’s resident state when filing their taxes.

If you file that way, you would file a married filing jointly tax return with Indiana but would likely owe because the nonmilitary spouse did not withhold Indiana taxes.

Then the nonmilitary spouse would file a nonresident tax return (because the spouse is a resident of Indiana) and request a refund of Virginia taxes withheld.

See this TurboTax Help.

[bsparenborg]

Is my wife still eligible under MSRRA if she is a resident of Virginia and I am the resident of Indiana ?

thanks. 

[MaryK4]

The Veterans Benefits and Transition Act of 2018 allows military spouses to choose the legal residence of their service member for state and local tax purposes, as well as for registering to vote — regardless of whether the spouse has ever lived in that state.  If your spouse wishes to take Indiana for residency she can and you file as JamesG1 indicates above.

@bsparenborg