State taxes

[Jimmyhenion]

I am military and have Texas as resident for home of record. I PCS’d in 2021 from Texas to Virginia. My spouse started work in Virginia only. Why do I need to change to filing separate when I’m at the state filing step?

[MaryK4]

For Virginia, if only one spouse had income from Virginia sources, a separate return must be filed under Status 4.

However, under the Military Spouses Residency Relief Act, if she is present in Virginia solely to be with you (service member spouse who is permanently stationed here in compliance with military orders), shew could choose to keep her Texas residency and report her Virginia income to Texas (and since Texas does not have income tax she would not have to file). 

Use Form 763-S to request a refund. Be sure to complete the questionnaire on the back of the form, and attach the documents requested, including your W-2(s).

See Military Spouses and State Taxes - TurboTax Support

[Jimmyhenion]

If I am understanding. That means I cannot complete this through the TurboTax App?

[MaryK4]

The Form 763-S cannot be done in the app- you can fill it out online and then print and mail.  If you get free state filing, you could file the nonresident Status 4 for her only and report zero Virginia income and get the refund.  And if she has not already done so, she can request her employer stop the Virginia withholding.

@Jimmyhenion