Dual military filing joint federal with TX and IL residence question

Forum|Forum|5 years ago
February 20, 2021
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This is our first year filing taxes jointly and we submit our federal return. My husbands legal residence is TX so he doesn't need to submit anything for TX since he is military. Mine is IL and while I don't pay state taxes for my military pay, I still file a yearly return.

When I submit our federal filing jointly return it populated our state and it shows both our names. Is it legal to submit it (it shows $0 owed which is correct) with both our names is only I am the IL resident and he is from TX? Or do I need to file a separate state return for IL with my name only? - and if so how do I do this, I tried creating a second account and putting in only my W2 info and it showed me owing state taxes which is incorrect.

DawnC

Employee

Yes, as a married couple, it is legal for you to file a joint federal and/or a joint state return. Just because you have 2 different Home of Records (or State of Legal Residence), you are still married and can file joint returns. You do not need to create a separate account or another tax return. You generally have to file your state return using the same filing status as your federal return. Exceptions exist, but in your situation, you have no need to do that.

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TomD8

Employee

Section 302 of The Veterans Benefits and Transition Act of 2018 ("VBTA") changed the law so that, if an active duty servicemember is a legal resident of a particular state for tax purposes, the spouse can unilaterally elect to also be a resident of that same state. The factors previously used to determine the spouse's legal residence, such as the spouse's physical presence in a particular state or the identity of the state in which the spouse maintains a driver's license, vehicle or voter registrations, or professional licenses are no longer relevant.

See Section c (3) of this reference:

https://www.jag.navy.mil/legal_services/documents/Info_Paper_2018_SCRA_Amendments.pdf

Therefore you have the option of electing to be a resident of TX for tax purposes. You do not have to file an Illinois return.

Here's the actual text of the law (see Section 302):

https://www.congress.gov/bill/115th-congress/senate-bill/2248/text

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