According to New Jersey Department of the Treasury, "the Military Spouses Residency Relief Act provides that a spouse of a service member may be exempt from New Jersey Gross Income Tax on income from services performed in New Jersey if:
- the service member is present in New Jersey in compliance with military orders
- the spouse is in New Jersey solely to be with the service member
- the spouse maintains domicile in another state."
To claim tax-exempt from New Jersey withholdings:
Spouses whose wages are exempt from New Jersey Gross Income Tax under the Military Spouses Residency Relief Act may claim an exemption from New Jersey Income Tax withholding on Form NJ-165 to be filed with their employers.
To claim a refund of taxes withheld from your New Jersey income, follow these steps in the program:
- State Section
- Nonresident New Jersey return
- Income Subject to Tax
- Resident Military Income treated as Non-Resident Income for NJ purposes OR Pennsylvania residents as a result of the Reciprocal Personal Income Tax Agreement (please refer to the instructions for more information)
- Enter the spouse's New Jersey income that should not have been taxed.
If you are filing a paper return, print “Military Spouse” at the top of the Form and attach a copy of the spousal military identification card. Military spouses requesting a full refund may be required to provide additional documents.
Military Spouse income may be taxable on your state return where you file as a resident.
For more information, see: