According to Colorado Department of Revenue, "For tax years beginning on or after January 1, 2009, a military spouse may be able to exclude their wages and tips from Colorado income tax, in certain circumstances. The spouse must meet all of the following criteria:
- The service person and their spouse are married.
- The spouse moved to Colorado from another state and the spouse works in Colorado.
- The spouse's sole purpose for being in Colorado is to accompany the service person while they are stationed in Colorado on military orders."
To claim tax-exempt from Colorado withholdings:
If you wish to claim tax-exempt withholding due to the Military Spouse Residency Relief Act (MSRRA), you will need to complete Form DR-1059 and submit it to your employer. You will also need to provide a copy of your military dependent ID card. This form needs to be completed each year.
To claim a refund of taxes withheld from your Colorado income, follow these steps in the program:
- Federal Section
- Wages and Salaries, edit the W-2 for the military spouse income and remove the information in Box 16 of the W-2. Leave the amount in Box 17.
- Click Continue to save changes.
Military Spouse income may be taxable on your state return where you file as a resident
Visit our article on Colorado Military Filing for more information.