Different States for Work, Residence, and Home

Forum|Forum|4 years ago
January 6, 2022
1 reply
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My husband is Active Duty and claims California as his Home of Residency. We moved from Kansas to Hawaii in April. I still work remotely for a company in Kansas full-time. I changed my home address on my taxes to California in March to make things easier for us when we file. Because we're now living in Hawaii, we got new driver licenses, etc. with our new Hawaii address. Hawaii is technically our "State of residence (on December 31, 2021)", but we do not work here or get our income taxed here.

Summary:

Jan - March 2021 - Lived in Kansas, Taxed in Kansas

April - Dec 2021 - Lived in Hawaii, Taxed in California

Would I need to file for California, Kansas, AND Hawaii?

Not A Product Question

ThomasM125

You would normally be considered a resident of California under military rules, unless you opted out of that. As such, you would need to file a California return to report your non-military income. The only exception to this would be if you were away from California for 546 consecutive days, excluding 45 days allowed for occasional visits. In that case, you would be considered a non-resident and you would not have to file there. Your spouse would not have to file a return in California since he was out of the state on military duty, and has no California sourced income.

You would be required to file a tax return in Kansas, but only for the time you lived there. The income you earned while telecommuting in Hawaii would not be reportable to Kansas.

Since you are a resident of Hawaii, you do need to file a tax return there, to report your non-military income, the income from your employer in Kansas. If your spouse changed his home of record to Hawaii, he would need to file a part-year resident return in Hawaii as well. Otherwise, he would not.

Please keep in mind that you will get credit for any tax paid to one state on income also taxed in another state, so you shouldn't be double taxed on any income.

Also, you should look at the state wages listed on your W-2 forms, box 15 and 16, to see what states your income is reported to. Your employer may report wage income incorrectly, which could result in you having to prepare a tax return for the state listed on your W-2 form when you wouldn't otherwise have to do so. As a rule, you should file a tax return in the states whose wages are reported on your W-2 form!

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TomD8

Employee

"Hawaii is technically our "State of residence (on December 31, 2021)."

If your active duty servicemember spouse's military State of Legal Residence (SLR) is still California, then in the Personal Info section of TurboTax he should enter CA as his "State of Residence." (This may be different than his mailing address, which can be whatever he wants it to be.)

Note that SLR and HOR (Home of Record) can be two different things, as explained in this reference:

https://www.military.com/money/personal-finance/taxes/home-of-legal-record-for-taxes.html

Per the VBTA law of 2018, you as the spouse of an active duty servicemember may choose to file taxes as a resident of your spouse's SLR, or as a resident of your own state of domicile.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Carl11_2

Employee

If you will be filing more than one state tax return, save the "RESIDENT" state tax return for last. Otherwise, you will not receive proper credit in your resident state, for taxes paid to the non-resident state.

Note that Hawaii is "NOT" your resident state, no matter what. Military spouses who have HI based income can qualify for an exemption from HI state taxes under MSRRA. See https://www.hawaiipublicschools.org/DOE%20Forms/Military/MilitarySpouseTaxExemption.pdf for information on this.