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Dude32
New Member

Retired from military/resident of multiple states in 2023; have to use married filing separately?

TLDR- Do I have to use married filing separately if I (but not my active duty military spouse) was a resident of multiple states after I retired from the military in 2023? 

Hello all,

I retired from the military on 1 Jun 23, my wife remained active duty through all of 2023.  I started the year as a CA resident, and after retiring, became a VA resident.  My active duty pay went to CA for state taxes, and my retirement pension went to VA, and I did not have a job for the remainder of the year.  My wife is a WA resident and doesn't pay state taxes.

 When attempting to file my VA state taxes, TurboTax informed me that I'd have to use Married Filing Separately (MFS) since I was a resident of multiple states for 2023. We've been filing jointly for over decade, sometimes with multiple state returns due to owning rental properties. 

I would very much like to NOT use MFS for multiple reasons, and was hoping I was missing something, especially related to unique military status, that would allow me to file jointly.

Thanks so much everyone!

 

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2 Replies
DMarkM1
Expert Alumni

Retired from military/resident of multiple states in 2023; have to use married filing separately?

Yes, you do have unique military status as a spouse to an active duty military person.  You can choose to claim your state of residence to match your active duty spouse's state of residence.  Assuming your spouse is stationed in VA on military orders and you are there to be with your spouse then you both would be non-resident to VA.  You would file a joint non-resident VA return to claim any VA taxes withheld from your retirement.  NOTE:  If you have rental property in VA you would include that in your joint VA non-resident return as well. 

 

In the "My Info" section indicate your resident state for you and your spouse is WA on 31 Dec.  Next show that you resided in a different state (CA) during the year and put in the date you left active duty as the date arrived in WA.  Finally, still in the "My Info" section, scroll down to "Other State Income" and indicate you earned money in another state and select VA.  This will generate the non-resident VA forms and CA part-year forms. 

 

If for some reason you want VA to be your resident state then indeed you would need to file a separate VA return. 

 

Be sure to have DFAS change your state of residence to WA going forward to stop the VA withholding, if applicable.  

 

You are going to file the part-year CA return only allocating the income during your active duty time to CA, but identifying yourself as military stationed outside of CA; just as you likely have been doing in the past.  

 

The remainder of the year would be WA source income and since there is no state income tax there no filing would be necessary to WA.    

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Dude32
New Member

Retired from military/resident of multiple states in 2023; have to use married filing separately?

Great stuff, thank you!

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