Military Financial Advice - Army Times

Navigate your state (N – Z)

Below is a state-by-state guide with general information on filing your state income tax return for 2006. For more information, see the Web sites or call the phone numbers listed for each state.

Nebraska

Department of Revenue

Taxpayer Assistance

301 Centennial Mall S.

P.O. Box 94818

Lincoln, NE 68509-4818

(402) 471-5729

(800) 742-7474 (in state)

Web site: www.revenue.ne.gov

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Nebraska source, he may be required to file Form 1040N.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 6.84 percent

Deadline: April 15

Nevada

Department of Taxation

1550 College Parkway

Suite 115

Carson City, NV 89706

(775) 684-2000

Fax: (775) 684-2020

Web site: http://tax.state.nv.us

No state income tax.

New Hampshire

Department of Revenue Administration

45 Chenell Drive

Concord, NH 03302-0457

(603) 271-2191

Fax: (603) 271-6121

Web site: www.revenue.nh.gov

No earned income tax.

Taxable: 5 percent tax on interest and dividend income over $2,400 for singles or $4,800 for married people filing jointly.

Accepts computer forms? Yes

Allows electronic filing? Yes

Deadline: April 15

New Jersey

New Jersey Division of Taxation

Information and Publications Branch

P.O. Box 281

Trenton, NJ 08695-0281

(609) 292-6400

Refund: (800) 323-4400 (in New Jersey, New York, Pennsylvania, Delaware and Maryland); (609) 826-4400

Web site: www.state.nj.us/treasury/taxation/

Web file: www.njwebfile.com

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and New Jersey Tax Topic Bulletin GIT-7 for Military Personnel.

Exit bonuses/separation pays: If coded as a “mustering out” payment, they are not taxable.

Retired pay/survivor benefits: Exempt.

Accepts computer forms? Yes

Allows electronic filing? Yes, except for Form NJ-1040 with an out-of-country address; full-year residents filing jointly with part-year residents; full- or part-year residents filing jointly with nonresidents; or filings for estates or trusts.

Nonresident filing: If the military nonresident has nonmilitary income from a New Jersey source, he may be required to file Form NJ-1040NR.

Permits separate returns even if a joint federal return is filed? In certain cases. See Tax Topic Bulletin GIT-7.

Maximum tax rate: 8.97 percent

Deadline: April 16

New Mexico

Taxation and Revenue Department

1100 S. St. Francis Drive

P.O. Box 630

Santa Fe, NM 87504-0630

(505) 827-0700

Refund: (505) 827-0827

Web site: www.state.nm.us/tax

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Individuals 65 or older may be eligible for a deduction up to $8,000.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a New Mexico source, he is required to file Form PIT-1.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 5.3 percent

Deadline: April 16. Deadline extended to April 30 if the taxpayer files and pays online.

New York

Department of Taxation and Finance

W.A. Harriman Campus

Albany, NY 12227

(800) 225-5829

Forms: (800) 462-8100

Refund: (800) 443-3200

Web site: www.nystax.gov

Military income exemptions: Combat-zone pay is exempt from New York tax to the same extent that it is exempt from federal income tax. Income received as a member of the New York state organized militia for performing active-duty service within New York state due to: (1) state active-duty orders issued under New York Military Law, Section 6.1; (2) active service of the U.S. pursuant to federal active-duty orders for service other than training, issued under U.S. Code Title 10, is excluded from New York adjusted gross income. If federal income includes any compensation or bonuses for active service while a prisoner of war or missing in action during the Vietnam War, these amounts are excluded from New York adjusted gross income. For more detail, see Publication 361, “New York State Income Tax Information for Military Personnel and Veterans.”

Exit bonuses/separation pays: Follows federal tax rules. See IRS Publication 17.

Retired pay/survivor benefits: Pension payments received by retired military personnel or their beneficiaries are not taxed.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a New York source, he may be required to file Form IT-203.

Permits separate returns even if a joint federal return is filed? Generally, no. Exceptions include (1) one spouse is a New York state resident and the other is a nonresident or part-year resident; (2) the address or whereabouts of a spouse is unknown; and (3) a spouse refuses to sign a joint New York return.

Maximum tax rate: 6.85 percent

Deadline: April 16

North Carolina

North Carolina Department of Revenue

P.O. Box 25000

Raleigh, NC 27640-0640

(877) 252-3052

Forms: (877) 252-3052

Refund: (877) 252-4052

Web site: www.dornc.com

Military income exemptions: Follows federal tax rules. See IRS Publication 17.

Exit bonuses/separation pays: May deduct up to $35,000 of any severance wages received as a result of your permanent involuntary termination from employment through no fault of your own.

Retired pay/survivor benefits: If you have five years’ creditable service as of Aug. 12, 1989, all military retired pay is exempt from taxes; otherwise, up to $4,000 deduction is allowed for military retired pay or survivor benefits.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a North Carolina source, he may be required to file Form D-400.

Permits separate returns even if a joint federal return is filed? Yes, if the taxpayer or the spouse is a nonresident and had no North Carolina taxable income, then the “married, filing separately” status must be claimed. Starting in the 2006 tax year, you can file a joint state return if you filed a joint federal return, even if your spouse is a nonresident and had no North Carolina taxable income.

Maximum tax rate: 8.25 percent

Deadline: April 15

North Dakota

Office of State Tax Commissioner

State Capitol

600 E. Boulevard Ave., Dept. 127

Bismarck, ND 58505-0599

(701) 328-2770

Fax: (701) 328-3700

Refund: (701) 328-3450

Web site: www.nd.gov/tax

Military income exemptions: If Form ND-2 (optional method) is used, an exemption of up to $1,000 of compensation for active-duty service or for service in the reserve or North Dakota National Guard is allowed. An exclusion of up to $300 of compensation for active-duty service is allowed for each month (or fraction thereof) of service outside the U.S. Field-grade and general officers are not eligible for this exclusion. Service personnel are advised to complete Form ND-2 and Form ND-1 (short form) to see which yields the lower tax. Otherwise, follows federal tax rules. See IRS Publication 17.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: If Form ND-2 is used, an exclusion is allowed if a retiree is at least 50 years of age. In addition, up to $5,000 of military retirement pay for service in the U.S. armed forces is excluded, provided the individual is at least 50 years old. This retirement exemption must be reduced by Social Security benefits received during the year.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a North Dakota source, he may be required to file Form ND-1 or ND-2.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 5.54 percent on Form ND-1; 12 percent on ND-2

Deadline: April 16

Ohio

Ohio Department of Taxation

4485 Northland Ridge Blvd.

Columbus, OH 43229

(800) 282-1780

Forms: (800) 282-1782

Refund: (800) 282-1784

Web site: http://tax.ohio.gov

Military income exemptions: Follows federal tax rules and federal rules for pay earned in a combat zone. See IRS Publication 17.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Graduated tax credit up to $200, based on amount of retirement income.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income, he is required to pay Ohio income tax on the nonmilitary income earned or received in Ohio. If the income is W-2 wages and/or rent received on Ohio rental property, it is included in the federal adjusted gross income entered on Line 1 of Form IT-1040. It is not subtracted on Line 2. Interest and dividend income of the military nonresident is included in Line 1. It is not subtracted on Line 2. All nonmilitary income not earned and not received in Ohio is calculated on Schedule D and entered on Line 13 of the form.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 6.87 percent

Deadline: April 16

Oklahoma

Oklahoma Tax Commission

P.O. Box 53248

Oklahoma City, OK 73152

(800) 522-8165 (in state)

(405) 521- 3160 (out of state)

Forms: (405) 521-3108

Web site: www.tax.ok.gov

Military income exemptions: The first $1,500 of active-duty pay and POW/MIA benefits is exempt. Otherwise, federal tax rules apply. See IRS Publication 17 and IRS Publication 3.

Retired pay/survivor benefits: 50 percent of military retirement pay or $10,000, whichever is greater, is excludable.

Accepts computer forms? Yes

Allows electronic filing? Resident returns are accepted electronically. Nonresidents must file Form 511NR by mail.

Nonresident filing: If the military nonresident has nonmilitary income from an Oklahoma source, he may be required to file Form 11NR.

Permits separate returns even if a joint federal return is filed? Yes, but only in the case of an Oklahoma resident filing a joint federal return with a nonresident, nonmilitary spouse. For all others, follows federal tax rules.

Maximum tax rate: 6.25 percent

Deadline: April 16, with exceptions for some military reasons, including hospitalization and absence from the U.S.

Oregon

Oregon Department of Revenue

955 Center St. N.E.

Salem, OR 97301

(800) 356-4222 (in state)

(503) 378-4988 (out of state)

Fax: (503) 945-8738

Web site: www.oregon.gov/dor

Military income exemptions: Exempts all active-duty pay earned outside Oregon and up to $3,000 of active-duty pay earned in Oregon. Each spouse receiving active-duty pay may claim the subtraction up to a limit of $3,000 each ($6,000 total on a joint return). Otherwise, federal tax rules apply. See IRS Publication 17. Combat pay is excluded for all active-duty personnel (officers and enlisted).

Exit bonuses/separation pays: Treated the same as other military income.

Retired pay/survivor benefits: Service members who retired before Oct. 1, 1991, do not have their military retirement taxed by Oregon. Retirees who worked for the federal government before Oct. 1, 1991, but who did not retire until after that date, must pay taxes on the portion of their federal pension attributable to federal service after Oct. 1, 1991.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from an Oregon source, he is required to file Form 40N.

Permits separate returns even if a joint federal return is filed? Yes, for spouses who do not have the same residency status.

Maximum tax rate: 9 percent

Deadline: April 16

Pennsylvania

Department of Revenue

4th and Walnut streets

Harrisburg, PA 17128

(717) 787-8201

Forms: (888) 728-2937

Refund: (888) 728-2937

Web site: www.revenue.state.pa.us

Military income exemptions: For state residents, all active-duty pay earned outside the state is exempt; the state will accept as proof the authority section of the military orders directing the Pennsylvania resident to federal duty outside Pennsylvania. POW/MIA benefits are also exempt.

Exit bonuses/separation pays: Taxed if received by state resident while in the state; otherwise, not taxed.

Retired pay/survivor benefits: Retirement income is not taxed after age 59½ if the person has reached retirement, based on years of service or age.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Pennsylvania source, he may be required to file Form PA-40.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 3.07 percent flat tax

Deadline: April 16

Rhode Island

Rhode Island Division of Taxation

One Capitol Hill

Providence, RI 02908

(401) 222-1040

Fax: (401) 222-7988

Forms: (401) 222-1111

Web site: www.tax.ri.gov

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Rhode Island source, he may be required to file Form 1040NR.

Permits separate returns even if a joint federal return is filed? Yes, if one spouse is a resident of Rhode Island and the other is a nonresident or part-year resident.

Maximum tax rate: 9.9 percent

Deadline: April 16

South Carolina

South Carolina Department of Revenue

P.O. Box 125

Columbia, SC 29214

(803) 898-5709

Forms: (800) 768-3676

Refund: (803) 898-5300

Web site: www.sctax.org

Military income exemptions: Follows federal tax rules. See IRS Publication 17. Income received for weekend drills and customary training periods when serving in the reserve or National Guard is deductible; expenses related to inactive-duty military reserve income are not deductible.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: A taxpayer can deduct up to $3,000 of qualified retirement income annually until age 65 and up to $10,000 per year after age 65. A surviving spouse can deduct up to $3,000 or $10,000 of the deceased spouse’s qualified retirement income based on the birth date of the deceased spouse. Pension or retirement income received for time served in the National Guard or reserve components is not taxable. Survivor benefits are taxed following federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a South Carolina source, he is required to file Schedule NR and SC1040.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 7 percent

Deadline: April 16

South Dakota

South Dakota Department of Revenue and Regulation

445 E. Capitol Ave.

Pierre, SD 57501-3185

(605) 773-3311

(800) 829-9188 (nationwide)

Web site: www.state.sd.us/revenue/revenue.html

No state income tax.

Tennessee

Tennessee Department of Revenue

Taxpayer Services Division

500 Deaderick St.

Nashville, TN 37242

(800) 342-1003 (in state only)

(615) 253-0600 (Nashville and outside of Tennessee)

Refund: (615) 741-0443

Web site: www.tennessee.gov/revenue

No earned income tax.

Taxable: The Tennessee income tax is limited to a tax on interest from bonds and notes and dividends from stock and mutual funds — 6 percent on interest and dividends over $1,250 for singles or $2,500 for married persons filing jointly; interest and dividends received from certain institutions in Tennessee are exempt (check with state for listing).

Accepts computer forms? Yes

Allows electronic filing? Yes

Maximum tax rate: 6 percent

Deadline: April 15

Texas

Texas Comptroller of Public Accounts

P.O. Box 13528, Capitol Station

Austin, TX 78711-3528

(877) 662-8375

Web site: www.window.state.tx.us

No state income tax.

Utah

Utah State Tax Commission

210 N. 1950 West

Salt Lake City, UT 84134-0260

(801) 297-2200

(800) 662-4335 (outside Salt Lake City area)

Fax: (801) 297-6358

Forms: (801) 297-3502

Refund: (801) 297-2200 or

(800) 662-4335

Web site: www.tax.utah.gov

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and Utah Publication 57, “Military Personnel Instructions.”

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Up to age 65, an individual can deduct up to $4,800 of qualified retirement (up to $7,500 for age 65 or older); deductions apply to survivor benefits. Subject to income limitations based on filing status.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filings: If the military nonresident has nonmilitary income from a Utah source, he may be required to file Form TC-40.

Permits separate returns even if a joint federal return is filed? Yes, if one spouse is a full-year Utah resident and the other is a nonresident.

Maximum tax rate: 6.98 percent

Deadline: April 16

Vermont

Vermont Department of Taxes

133 State St.

Montpelier, VT 05633-1401

(802) 828-2865

(866) 828-2865 (toll-free in state)

Fax: (802) 828-2720

Refund: (802) 828-2865, option 1

Web site: www.state.vt.us/tax/

Military income exemptions: Military pay is exempt for full-time active duty with the armed services when pay is earned outside of Vermont. The first $2,000 of 2006 National Guard and reserve training pay is exempt if federal adjusted gross income is less than $50,000 — a letter from the unit is needed to claim exclusion. Funds received through the federal armed forces educational loan repayment program are exempt to the extent the funds are included in adjusted gross income.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Vermont source, he may be required to file Form IN-111 and Form IN-113.

Permits separate returns even if a joint federal return is filed? No, unless one of the spouses is a nonresident who has no Vermont income.

Maximum tax rate: 9.5 percent

Deadline: April 17

Virginia

Virginia Department of Taxation

Office of Customer Services

P.O. Box 1115

Richmond, VA 23218-1115

(804) 367-8031

Fax: (804) 254-6113

Forms: (804) 440-2541

Refund: (804) 367-2486

Web site: www.tax.virginia.gov

Military income exemptions: Up to $15,000 of military basic pay received during the taxable year may be exempted from Virginia income tax. The exemption amount is reduced when military pay exceeds $15,000 and is fully phased out when pay reaches $30,000. Military personnel must serve on active duty for 90 days or more and can be stationed inside or outside of Virginia.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Follows federal tax rules. Military retirement income received by individuals awarded the Medal of Honor can be subtracted from federal gross income for tax purposes.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Virginia source, he may be required to file Form 763.

Permits separate returns even if a joint federal return is filed? Yes. If you are a nonresident and your spouse is a resident of Virginia, you must file separate returns.

Maximum tax rate: 5.75 percent

Deadline: May 1. For service members stationed outside the U.S. or Puerto Rico on that date, due date is extended to July 1; write “Overseas Rule” at the top of your return.

Washington

Taxpayer Services Division

P.O. Box 47478

Olympia, WA 98504-7478

(800) 647-7706

Web site: www.dor.wa.gov

No state income tax

West Virginia

State Tax Department

Taxpayer Services Division

P.O. Box 3784

Charleston, WV 25337-3784

(304) 558-3333

(800) 982-8297

Forms: (304) 344-2068

Refund: (800) 422-2075

Web site: www.state.wv.us/taxdiv

Military income exemptions: If a military resident spends 30 days or fewer in the state during the tax year, his military income is not subject to West Virginia tax. Otherwise, follows federal tax rules. Guard/reserve pay for Operation Enduring Freedom or domestic security duty is not subject to tax.

Exit bonuses/separation pays: Taxed in West Virginia.

Retired pay/survivor benefits: There is a maximum decreasing modification of $22,000 or the total amount of military pension, whichever is less. This includes any survivor annuities to the extent this income is included in gross income for federal income tax purposes for the tax year.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a West Virginia source, he may be required to file Form IT-140NR/PY.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 6.5 percent

Deadline: April 16

Wisconsin

Wisconsin Department of Revenue

Individual Income Tax Assistance

P.O. Box 59

Madison, WI 53785-0001

(608) 266-2486

Forms: (608) 266-1961

Refund: (608) 266-8100 or (866) 947-7363 (toll-free)

Web site: www.revenue.wi.gov

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and Wisconsin Publication 104, “Wisconsin Taxation of Military Personnel.” Certain Guard/reserve members may exclude military pay received during a period of time while called to active duty.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: All military retirement pay is exempt.

Accepts computer forms? Yes

Allows electronic filing? Yes, except Form 1NPR

Nonresident filing: If the military nonresident has nonmilitary income from a Wisconsin source, he may be required to file Form 1NPR.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 6.75 percent

Deadline: April 16

Wyoming

Department of Revenue

122 W. 25th St., 2 West

Cheyenne, WY 82002-0110

(307) 777-7961

Web site: http://revenue.state.wy.us/

No state income tax.