The Soldiers and Sailors Relief Act prevents military personnel from being taxed on military income by any state other than their home of record.
Effective with your 2003 Missouri return, the Service Members Civil Relief Act, H.R. 100, prohibits states from including the military income of nonresident service member when determining the individual income tax rate for a service member and the service member’s spouse on a combined return.
Your home record is North Carolina. You and your spouse are stationed at a military base in Missouri. You income is completely from the military and your spouse’s income is from a civilian job in Missouri. You must complete a Form MO-1040 along with a Form MO-NRI. Your military pay is not taxable but your spouse’s income is taxable in Missouri. To ensure you receive the benefits of this, complete Form MO-1040, and subtracted the military income from your federal adjusted gross income. Enter your nonresident military income and check the military box on Form MO-A, Part 1, and Line7.
The Sailors Relief Act only prevents states from taxing your military income if your home of record is not that state. It does not prevent you from having to pay state taxes in Missouri if you have income other than military income.
Your home of record is Georgia. You are stationed in Missouri living on base housing. Part of your income is military pay and the other part is from a civilian job in Missouri. You will need to pay taxes in Missouri on the nonmilitary income. You will need to fill out the same Forms and complete the same way as with the above example.
If you are a resident of Missouri and stationed in another state, with all your pay being from the military, you are still required to fill out the Missouri Forms. You will not be taxed on this income though.
If your home of record is Missouri and you are stationed on a base in Missouri for more than 30 days your military income is taxable in Missouri.
If your spouse stays in Missouri you are still required to pay Missouri taxes and your military pay is taxable.
Your home of record is Missouri. You are stationed in California all year. While your spouse spent part of the year in Missouri. You now must complete Form MO-1040 long form. You military income must be included because it is now taxable in Missouri.
The Internal Revenue Service, as well as Missouri tax laws, provides special benefits for active members of the United States Armed Forces, including those serving in combat zones.
Members of the Armed Forces serving in a combat zone or hazardous duty zone may be eligible to exclude some pay from income. As a rule, enlistees up to warrant officers (including commissioned warrant officers) can exclude all military pay received for service in a combat zone. Commissioned officers have a monthly exclusion that is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay. Amounts excluded from gross income are also not subject to federal income tax.
Military taxpayers serving in a combat zone should write “Combat Zone” and their deployment date in red at the top of their tax form.
The IRS gives an extension of at least 180 days past the last day of combat zone service or the last day of hospitalization for a combat-related injury. The IRS also extends deadlines for military personnel who are sent overseas in support operations in a qualified hazardous duty area but who are outside that area.
Combat zones include the Persian Gulf as well as Kosovo and some other parts of the former Yugoslavia, and Afghanistan, plus some other Middle Eastern locations that serve as support areas for military operations.