My LES stated I was a TX resident from Jan-Aug. I realized it was incorrect and changed it to DE in Sep. Would I claim Texas as my home of record so I don’t get screwed over for not paying DE sta

[nicolecart97]

My LES stayed I was a TX resident from Jan-aug. I realized it was wrong changed it to DE in sept. Would I claim TX as my home of record so I don’t get screwed over for not paying DE tax?

[AmyC]

DE will tax you for income earned in DE regardless of the dates.

Since you have TX income, you would file Nonresident. DE instructions state "Part-year residents electing to file a non-resident return – This option may be advantageous if, during the period of non-residency, you had any income from other states or sources outside of Delaware."

Please see the DE Instructions for more information.

The DE return for non-residents does not ask for dates in DE. Currently, DE is not available online. This link will keep you updated for availability.

Since you are military, be sure to answer the military question in the personal section, My Info, as seen below.

The program will then ask questions depending on your answers to create an accurate return.

Be sure to mark TX as your home of record. The program will ask where else you made money.

[SteamTrain]

@AmyC   @nicolecart97 

There may be more going on here than is really clear yet.  (or am I  just looking at complications that don't exist)

Nicole: I'm not clear what your actual HOR is.  

My point is this, normally, for a military person, you get to use your HOR state as your Residence state no matter what state you are posted in.  This is a special situation established by Federal Law.  It allows military service people to only pay income taxes in their home state and not have to keep filing part-year tax returns as the get re-posted to new bases.  (and TX doesn't have an income tax...wohoo for those with TX HOR)

So if you signed-up/entered the military as a TX resident (HOR will be TX)....then your LES should reflect TX always, and no other state should get taxes from your PCS to and living in a different state.   But yeah, I have heard it is possible to get payroll to withhold for other states in certain personal situations.   .......But maybe you entered service as  a DE resident, so is DE your actual HOR?  or TX

_________________________

But as a secondary "quirk" to this, if you are posted to a new state, you are allowed, in some instances, to become a "Legal resident" of that state....but to do that you have to submit special paperwork to your military branch (payroll and HR) detailing your wish to be a legal resident of that state.  This requires the submission of a DD-2058 detailing what you've done to establish legal residence in that new state.    After doing that, you are then subject to the tax laws in that state.   (With a DD-2058, Almost no one would voluntarily switch from TX to DE.  Thousands switch from their original HOR to TX when they get posted to TX). 

But if you really started with DE as your HOR.....seems unusual that TX would be on your LES..but I guess accidents "happen")

So the bigger questions are:

1) Confirm that TX was your original HOR....or was it DE ???

2) ...........IF HOR was TX, then, exactly how did you get tax withholding started for DE.  Did you just have payroll start withholding DE taxes?  or did you file the full DD-2058 to legally become a DE resident.

3) where were you posted during 2019?

How you handle your situation tax-wise really depends on your answers to those questions.

[Critter]

What is my military state of residence?

There are two terms used by the military to define your state of residence:

Home of Record. Your home of record is the state recorded by the military as your home when you were enlisted, appointed, commissioned, inducted, or ordered in a tour of active duty. This is often the state you should continue to use as your tax home as you move from state to state (or overseas) on military orders.

State of Legal Residency. Your state of legal residency (SLR) is your “Home of Record,” unless you changed it to another state. Changing the state on your paycheck records does not change your SLR.

To change the SLR, a DD Form 2058 must be submitted to your local finance officer and accepted.

From a tax standpoint, your State of Legal Residency (SLR) is considered your “domicile” or “resident” state as long as you are on active duty. Even if you are stationed in another state, you’re still considered a resident of your SLR.

To find out if you need to file a state tax return when you aren't stationed in your resident state, check out Military Information on State Websites, which has links for active duty military and their spouses in each state. If you have non-military earnings, review Civilian Pay Earned by Active Duty Military.

IMPORTANT: The Military Spouse Residency Relief Act (MSRRA) describes where spouses of military service members can file state income taxes. For more information, see Military Spouses and State Taxes.

Residency Examples

Consider Joe, who lived in South Carolina when he joined the military in 2010. This was recorded as his Home of Record and SLR. With Permanent Change of Station (PCS) orders, he is now stationed in Maryland and lives in Virginia.

Joe files a resident return in which state?

We know that Joe is considered a South Carolina resident (that's his State of Legal Residency). South Carolina says that Joe must continue to file a South Carolina resident income tax return regardless where he is stationed.

Each state decides whether service members must file a return when they are stationed outside their resident state.

If Joe’s SLR was in a different state, he might be required to file a return for that state and then deduct all of his active duty income, resulting in little or no state income tax. Some SLR states, like South Carolina, will tax Joe on his income even if he is stationed outside of his SLR state.

Other SLR states (such as California)  may consider their service member as nonresident when stationed outside their state. For guidance about filing in a state other than your SLR state, see that state’s military page at State Tax Websites.

Does Virginia or Maryland expect a tax return from Joe?

The Service Member Civil Relief Act states that an active duty member is not considered a resident of a state unless it is his SLR.

Joe would only file a Virginia or a Maryland return if he had a civilian (nonmilitary) job in that state. If he works at Home Depot in Virginia on the weekends, he would file as a Virginia nonresident and only report income from that W-2. He would not report any other type of income on his Virginia return. He would still file a South Carolina resident return, where he may get a credit for the tax he paid on his wages to Virginia.

If Joe is married and his wife works in a civilian job in Virginia she might have to file a state tax return in Virginia. However, if she qualifies under MSRRA, she might also be able to claim South Carolina as her state of legal residence along with her husband and she might also be exempt from filing a Virginia state return. Be sure to check with the state you are currently in for their laws. For more information see Military Spouse Residency Relief Act and State Taxes.

Related Information:

• Military Filing Information on State Websites
• Military Spouses and State Taxes
• Civilian pay earned by active duty military