According to the Vermont Tax Guide for Military and National Services, "Servicemembers who only live in Vermont because they are following military orders are nonresidents for the purposes of taxation." These basic rules also apply to spouses of servicemembers. If a spouse can answer “Yes” to all three of the questions that follow, the spouse is a nonresident of Vermont for taxation purposes.
- Is your spouse a servicemember?
- Were you (spouse of the servicemember) a nonresident of Vermont prior to military orders.
- Were you (spouse of the servicemember) only located in Vermont because your spouse (servicemember) is complying with military orders?"
To claim tax-exempt from Vermont withholdings:
The Military Spouse may file Form W4-VT with their employer.
To claim a refund of taxes withheld from your Vermont income, follow these steps in the program:
- State Section
- Nonresident Vermont return - Edit (3 dots)
- Basic Information
- Select Resident State During NonResidency
- Subtractions from Income
- Military Pay (IN-113) - Enter the military spouse's pay as a positive number. The state may require a copy of the military orders to confirm the spouse is not subject to taxation.
Military Spouse income may be taxable on your state return where you file as a resident.