According to the New York State Department of Taxation and Finance, "The Military Spouses Residency Relief Act provides certain tax relief for spouses of service members (military spouses) who are present in a state solely to be with the service member when the service member is in that state in compliance with his or her military orders....".
Accordingly, a military spouse will not be treated as a resident of New York State for tax purposes (that is, the spouse will be treated as a nonresident) if the following conditions are met:
- The military spouse is located in New York State solely to be with the service member and the service member is located in New York State in compliance with his or her military orders
- The service member and his or her spouse were residents or domiciled in a state other than New York State before being located in New York."
For additional information on the New York implementation of the Veterans Benefits and Transition Act of 2018 click here.
To claim tax-exempt from New York state withholdings complete Form IT-2104-E, Certificate of Exemption from Withholding, and file with the military spouse's employer to claim exemption from withholding for New York State personal income tax (and New York City and Yonkers tax, if applicable).
To claim a refund of taxes withheld from your New York income, due to electing to chose the same state of residence as the military servicemember, follow these steps in the program:
- Federal Section
- Edit the W-2 for the military spouse
- Remove the amount listed in Box 16 for State Wages.
- State Section
- New York Nonresident Return
- Basic Information
- Special Conditions
- Choose Veteran Benefits and Transition Act from drop down
NOTE: Military Spouse income may be taxable on your state return where you file as a resident.