According to Military.com and the Washington DC filing Instructions, active duty military residents of Washington DC are required to file a resident return and include all of their income earned in Washington DC.
If you are a resident of Washington DC, you are required to file a resident return and include all of your income earned in DC.
If you are a nonresident of Washington DC stationed in DC, you are not required to pay state income tax on your active duty military pay. Please keep a copy of your legal residence form with your taxes in case it is requested.
To deduct the military income from the nonresident return, follow this steps in the program:
- State Section
- Nonresident DC Return
- Basic Information
- Enter the abbreviation for your domiciliary or legal state of residence
If one spouse is a resident of Washington DC and the other is not, you may wish to file a married filing separate return. You can choose to file Married Filing Separate on separate returns or married filing separate on the same return, whichever is more beneficial for you.
For more information, see