How do I deduct military spouse’s income on the Virginia return?

Under the Servicemember Civil Relief Act, as amended by the Military Spouses Residency Relief Act, a spouse of a military servicemember may be exempt from Virginia income tax on wages if:

1. the servicemember is present in Virginia in compliance with military orders;
2. the spouse is present in Virginia solely to be with the servicemember;
3. they both maintain the same non-Virginia domicile state.

More information is available in Tax Bulletin 09-10 and Tax Bulletin 10-1 available on the website at www.tax.virginia.gov.

How to claim tax exempt from Virginia Withholdings?

If you qualify, you can stop your withholding by submitting a revised Form VA-4 to your employer.  If you are claiming exemption under the Military Spouses Residency Relief Act, check the box on Line 4 and attach a copy of your spouse's military ID card to the Form VA-4. This form must be filed annually with your employer.

How to claim a refund of taxes withheld from your Virginia income? 

To claim a refund of taxes withheld from your Virginia income, follow these steps in the program:

1. State Section
2. Nonresident Virginia Return
3. Income Subject to Tax
4. Wages for Spouses of Military Personnel: Under the Service member Civil Relief Act
5. Enter the wages as a positive number.
6. Continue

If you are filing to claim a refund of your state withholdings, the state requires you to paper file the return along with Form 763-S Virginia Special Nonresident Claim For Individual Income Tax Withheld.

Please Include:

• Copies of your W-2 Forms to document the Virginia income tax withheld,
• If your state of legal residence imposes an income tax, you must also attach a complete copy of the return you filed with that state,
• A copy of your military spouse ID card,
• Proof of your spouse's state of legal residence, such as a copy of a Leave and Earnings Statement (LES), current driver's license from the state of residence, or DD Form 2058 (State of Legal Residence Certificate).

Your refund cannot be issued unless all required items are attached to the 763-S Form.

Military Spouse income may be taxable on your state return where you file as a resident.