I commissioned after college and have been stationed overseas for the past three years. I’m about to head to another overseas base for two more years. My home of record from where I went to college and my parents live charges state income tax on military pay.
I don’t own property or have ties there besides my parents living in the state, yet I’ve still had to pay thousands in state taxes over the last few years while overseas. Is there any way to change my state of legal residence to one that doesn’t tax military pay while overseas given I have no real affiliation with my current state and don’t plan to work there after the military.
Overseas and State Taxes
byu/Cultural_Blood9338 inMilitaryFinance
Posted by Cultural_Blood9338
3 Comments
Which state?
It seems like the SCRA (50 USC 4001(a)(3)(C)) lets you pick your PDS as your residence for the purposes of taxation. If this is allowed and you do so, then no state would have the right to tax your military income since you are not stationed in any state.
Being stationed overseas does not automatically stop you paying taxes. Only certain tax exempt locations will do that.
In order to change state residencies, you need to be in the state and decide to that is the place you consider home. You would also do the things residents do like register to vote, get a drivers license, etc.