Definition of Virginia Source Income

[ordermurden]

My wife and I were legal residents of Florida the full year last year, but also lived part of the year on a military base in Virginia. My wife was a civilian working for the federal government. Are her wages considered "Virginia Source Income" and taxable by Virginia as a nonresident?

[jtax]

Hello @ordermurden  First, thank you very much for your service.

I am not an expert on this but a quick look and I found this Turobtax FAQ

https://ttlc.intuit.com/community/military/help/military-spouses-and-state-taxes/00/26149

and this from the Virginia Tax authority

https://www.tax.virginia.gov/military-spouses-residency-relief-act-faqs

It appears that your spouse's wages for a job performed in VA are not VA source income as long as he or she was in VA to be with you while you were permanently stationed in VA.

If your spouse had other VA source income (rental income or a business) that is probably VA income and not exempt (though it seems that some spousal business might be).

If your spouse had VA withholding you can get it back by filing a special form described on the VA tax site linked above.

[ordermurden]

Thank you very much for your quick reply! I should have provided more information on my circumstances. I have been retired since 2016 and am not in the military, so my spouse was not a military spouse.  She was a civilian working for the federal government, though we were stationed on a military base in Virginia. Any insight into my question about the tax treatment of her wages would be greatly appreciated!

[jtax]

I'm sorry I misunderstood.

Generally income for services performed while physically in a state is sourced in that state unless you can find an exception. It is hard to say there is no exception because you never really know if you have just missed something. If on the other hand you find an exception you know you have something.

I do not know enough about this to give you an answer. Sorry.

[Hal_Al]

Her wages during that time are VA source income.  I know of no exception for Federal Civil Service. 

References: http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/  

https://www.jmu.edu/financeoffice/instructions/763_Instr.pdf  (page 4)