Spouse's taxes after retiring from military

Forum|Forum|6 years ago
June 1, 2019
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My wife worked as a substitute teacher all of last year. For the first six months, I was in the military so she claimed residency with me in the state of Florida - no state income tax was withheld. After I retired, she became a Maryland state resident with me and the school started withholding Maryland state income tax. However, the W-2 reflects all of her income as Maryland (we're working to fix that). I've changed the numbers in TurboTax to reflect the amount she earned as residents of Maryland and Florida (on the W-2), but it did not change the Maryland tax (it should have dropped). How do I get TurboTax to recognize the Florida portion of her income as non-Maryland income?

TurboTax Premier Online

ToddL

Employee

The program should have an income allocation interview in the MD tax return program (don't change the state allocations in the Form W-2). In order to make the income allocation work, you have to show that you changed your state of residence from FL to MD. That, and your answers to the MD state return interview, will trigger the program to suggest filing a part-year resident tax return.

How to do that? When you complete the Personal Interview:

Select MD as your state of residence;
Answer "Yes" to "lived in another state in 2016?" (That state would be FL)
Date you became a resident of the new state? (That would be the date you left the service or retired)

(The question "lived in another state" applies to your state of residence. Active-duty military are considered to be "living" in their home of record state, regardless of where they are stationed. When you retired and remained in MD, you changed your residency to MD).