Hi, got to tech school about two months ago.
An offhand comment was made by legal services about how they can sometimes help epople avoid paying state income taxes (legally, mind you).
I'd like MA to stop taking $70 from each month's pay; does anyone know more about this, how it works, etc?
you pay state taxes to your home of record, regardless of where your duty station is.
for example, i go on active duty in the beginning of june. i have lived in FL the better part of my life, and it will remain my home of record.
i'll be moving to pilot school at the end of summer as a permenant change of station, but my home of record will remain florida.
FL doesnt have state income tax, therefore, i wont be paying any while i am on active duty, no matter where i live.
changing HOR is something that can be done, but not "just because" you need to have a good reason to change it. talk to your local jag and see what they say about getting it done.
Your state of legal residence determines your tax liability. There is no "Home of Record" block on a Leave and Earnings Statement, LES. You can change your residency by taking positive action such as registering to vote/voting, paying taxes, etc. in your new state. As a general statement, your home of record will never change.
I have almost 25 years on active duty, in the USAF. My home of record is Georgia (raised here and entered active duty here). My state of legal residence is Florida (was stationed there some years ago, took action to make it my legal residence, I vote there). I am currently stationed in Georgia. I don't pay Ga state taxes becuase I am a legal Florida resident.
When you get to your new assignment go to the JAG office and inquire about what you need to change your state of legal residency. It's usually pretty easy to do...register to vote, register your vehicles in the new state, etc. You usually have to be physically present in the new state for a period of time to be considered a resident.
You pay state taxes on your home of legal record. However you can change your residency to where your stationed after you have been there a while. For instance if your stationed in Texas when you get there get a Texas drivers licence and rent a residence after you have been there a cirtain amount of time you can change your legal residence to Texas (I use Texas as an example because there is no State income tax in Texas). This would not work out so well if the tax rate where your staioned is worse than your original home of record state.
Maine Revenue Services
Income/Estate Tax Division
Augusta, ME 04333-0024
(207) 626-8475 (automated during off business hours)
Forms: (207) 624-7894
Refund information: (207) 626-8461
Military members who are **legal residents** are taxed using federal income tax rules.
Nonresident military members who receive nonmilitary income from an in-state source must file.
Military income is used when computing tax on nonmilitary income.
Military retired pay and SBP benefits are taxed.
A military member’s legal residence does not change solely because of a change in duty assignment. The legal residence designated at the time of entry into the service remains the same until the member establishes a new legal residence. A completed DD Form 2058, “State of Legal Residence Certificate” is evidence of a change in domicile.
FUCK MAINE. You are screwed though, since you are stationed in California.
Try to become a Texas, Washington, Florida or any other non-income-tax state resident.
If you are a nonresident who is stationed in Maine, your military income will not be taxed by Maine, nor will income from intangible sources, such as interest and dividends. However, if you work at an additional job in Maine or operate a business in Maine, that income will be taxed.
Generally, the spouse of a nonresident will be considered a nonresident during the period the military member is stationed in Maine and will be taxed only on income derived from Maine sources. In certain circumstances, however, a spouse of a nonresident serviceperson may be a resident of Maine. In the case of a serviceperson married to a Maine resident, the resident spouse will continue to be a Maine resident until domicile is established in another state.
Individuals domiciled in Maine who are members of the armed forces of the United States, the National Guard or Reservists who received federal orders for active duty continue to be domiciled in Maine for income tax purposes for the period of time they are stationed outside of Maine.
Military Legal Residence and Home of Record
From Rod Powers,
Your Guide to U.S. Military.
In the United States Military, there is a difference between the terms "Home of Record," and "Legal Residence."
"Home of Record" and "Legal Residence" may, or may not be the same address. One's "Home of Record" is the place one was living when they entered the military (or, re-enlisted in the military, if one chooses).
"Home of Record" is used to determine travel entitlements when one separates from the military. It has nothing to do with voting or paying taxes, registering vehicles, nor any of the other priviledges of state residency.
"Home of Record" can only be changed if there is a break in service of more than one day, or to correct an error.
"Legal Residency," or "domicile", on the other hand refers to the place where a military member intends to return to and live after discharge or retirement, and which they consider their "permanent home." Legal residency determines what local (state) tax laws a military member is subject to, and in which local (city, county, state) elections they may vote in.
Because military members may have "legal residence" in one state, but be stationed in a different state, the Servicemembers Civil Relief Act, allows military members to pay taxes, register vehicles, vote, etc., in their "state of legal residence," rather than the state they are stationed in.
This can sometimes result in a tax advantage because several states exempt military pay from state taxes.
Does that mean a military member can change their "legal residence" anytime they want, and therefore avoid paying state taxes? Not quite. Under the law, "legal residence" is the place that the military member intends to live after they separate or retire from the military. It's the place that they consider their "permament home."
Depending on their service, and local polcies, an active duty military member can change their "legal residence" by visiting their local base legal office and/or base finance office and completing a DD Form 2058, State of Legal Residence Certificate.
However, the military is required by regulation to ensure that military members are not changing their "legal residence" for the sole purpose of obtaining a tax advantage. Therefore, when changing your "legal residence," military officials at the legal office (or finance office) may require some degree of proof that you consider the new state to be your "permament home."
The easist proof is "physical presence in the state." If you are currently stationed in a state, and wish to make it your permament home, it's generally pretty easy. If you are not currently stationed in the state you wish to make your permament home, and have never been stationed there, it become much harder. Generally, you need a specific address, not just the state in general. You can show your intentions to become a legal resident by registering to vote in the new state, by titling and registering your car in the new state (notifying your old state of the change), by getting a driver's license in the new state, or by preparing a new last will and testament (indicating your new state as your legal residence). Buying real property in the new state will also reinforce your claim.
Unless you can show such clear intentions, the military will probably not allow you to change your "legal residence."
Particular care should be taken to ensure your pay records are up-to-date concerning your state of legal residence. If incorrect, you may wind up paying taxes to the wrong state, or paying taxes and penalties in more than one state. If you have any doubt about your state of legal residence, contact your legal assistance office.
You may also be required to complete a W-4 form to determine the amount of withholding, or exemption from withholding state taxes.
YES! fuck Maine!!!!
i cant wait to move away just because of the taxes. well said!
KA3B -- THANK YOU!