It's that time of the year again-- time to file income taxes. Despite the current partial Federal Government shutdown, taxes are still due to the Internal Revenue Service (IRS) by April 18, 2023. The first day the IRS will begin accepting tax returns is Jan. 23, 2023. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.
While the legal office will not be offering in person tax preparation assistance this year, there are several cost-free options available to help you file. Tax preparation assistance or software is available for military members, retirees, and dependents by many entities. These programs walk a filer through a series of easy to understand questions and the software uses the answers to both fill in the required IRS forms, and ask related questions based on the information provided. Most of these programs offer customer support either online or via telephone.
Whether or not you claim Missouri as your state of legal residence, there are a few things you need to be aware of this tax season since you are stationed here in the Show Me State. Please start by selecting the category below that best applies to you!
Disclaimer: This information on this site is general in nature and does not constitute legal advice. Please consult a certified tax advisor if you have questions or concerns.
What You Will Need to Gather in Preparation for Filing Taxes:
o 19 January for Civilian employees, and
o 22 January Active Duty Army, Navy, and Air Force
Especially now during tax season, you should remain on the lookout for tax scams, which typically attempt to obtain personal information and ultimately steal money. The IRS will never initiate contact with taxpayers via email about a bill or tax refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. The IRS’ annual “Dirty Dozen” list of tax scams for 2018 can be found on their website.
Normally a worker will be taxed by the state in which income is earned. Under federal law, however, a Servicemember is allowed to maintain his or her original state of domicile for military tax purposes and for voting purposes even if he or she is stationed and living in a different state. A state of legal residence is also considered their “domicile” or “resident” state.
A Servicemember with a domicile in a state other than where he or she is stationed therefore can’t be taxed on military income earned in the state where he or she is stationed and can still vote in his or her original state of domicile. However, the Servicemember still can be taxed by the state he or she is stationed in on non-military income earned in that jurisdiction (off-duty employment).
Until recently, military spouses were not afforded similar protection. A spouse who moved to a new state and established a new residence and a new life there became a domiciliary of that new state (he or she became “domiciled” there).
The Military Spouse Residency Relief Act (MSRRA), signed in 2009, changed the basic rules of taxation with respect to a nonmilitary spouse of a service member, who is present with the service member (in compliance with military orders) but that state is not the spouses domicile (legal residence). Once the MSRRA was signed, a nonmilitary spouse of a service member may also be able to keep their state of residency the same as that of the service member, regardless of which state they currently live in. Under MSRRA, the spouse will not have to pay income taxes to the current State where income is earned if that is not their state of legal residence.
What is domicile (state of legal residence)? The place where one has (1) been physically present, (2) you have your permanent home and to which, whenever you are absent, you have the intention of returning. To change your domicile to a new state, the member/spouse must meet the above two criteria for the new state, and (3) abandon their old legal residence state.
A change to a new state is normally indicated by certain actions such as: (1) registering to vote; (2) purchasing residential property or an unimproved residential lot; (3) titling and registering your automobile(s); (4) notifying the State of your previous legal residence/domicile of the change in your State of legal residence/domicile; (5) preparing a new last will and testament which indicates your new State of legal residence/domicile; and for military members (6) completing a DD Form 2058, State of Legal Residence Certificate with the local Finance office. Finally, you must comply with the applicable tax laws of the State which is your new legal residence/domicile.
Until very recently, a nonmilitary spouse could not just choose the service member’s state or “inherit” or “adopt” that state upon marriage. However, with the passage of Veterans Benefits and Transition Act of 2018 on 31 December 2018, a spouse may now claim their military spouse’s state of residence even if the spouse has never established a physical presence in that state.
The spouse must also meet requirements 2 & 3 listed above before “claiming” it as their own resident state for MSRRA qualifications.
For a Spouse to qualify for the benefits of the MSRRA, the following conditions must be met:
a. The Servicemember is present in the state in compliance with military orders;
b. The nonmilitary spouse currently resides in a state different than the state of his or her domicile solely in order to live with a Servicemember who has been stationed there;
c. Both the service member and spouse claim the same domicile state.
Unlike the Servicemember, all of the spouse’s wages are taxed as if it were earned in the state of original domicile, not just military income (the spouse has no military income). Thus, even though it seems counterintuitive, this exemption from state income tax for spouses is broader than the exemption for Servicemembers.
Disclaimer: This information paper is one of a series of informative handouts containing general tax information. Information provided is general in nature and does not constitute legal advice.
Disclaimer: Please note the links to the services below are provided for informational purposes only and do not constitute endorsement or recommendation by Whiteman AFB, the Department of the Air Force or the DoD.
The DoD funded Military OneSource website provides free online tax software (H&R Block Premium) for military members and their dependents. The Military OneSource MilTax program also provides access to tax consultants with military expertise to answer your specific questions 7 days a week (0700 – 2300 EST) at 800-342-9647.
TurboTax: E1 to E5: Free Federal and State filing with their Free or Deluxe Edition, or a $5 discount off of Premier, Self-Employed, and TurboTax Live federal products.
TaxSlayer: Free Federal return for Active Duty military with TaxSlayer Classic.
offers free, individualized tax preparation for low to moderate income taxpayers, especially those 50 and older. Click here.
Tax Due Date: 18 April 2023
6 Month Extension: 17 Oct 2023.
If you can’t file your federal tax return by the 18 April 2023 deadline, then consider filing for an extension. Filing extensions are more common than you may think. But there are certain things you should know when you request a penalty-free extension for your federal taxes, including what kinds of extensions require you to pay any tax you owe upfront and those that allow you to delay payment.
There are three types of extensions available to service members:
• A 6-month extension will be granted if you apply for this extension using IRS Form 4868 before the regular due date for filing your return (18 April). An extension of time to file doesn’t mean you have an extension of time to pay any taxes due. If you owe taxes and don’t pay them along with your application for extension, you will be charged interest from the date the payment was due. Click here for information on filing extensions.
• If your duty post is outside the United States or Puerto Rico, you qualify for an automatic two-month extension without having to request an extension via IRS Form 4868. To receive this extension, you must attach a statement to your return explaining your situation and how you qualify for an extension. If you can’t file your return within the two months, you can request up to another four-month extension. If you owe taxes, your interest will start accruing from the date the payment was originally due (18 April).
• If you are serving in a combat zone or contingency operation, an automatic extension can be granted for filing your tax return, paying your owed tax or filing a claim for a refund. First, this deadline is extended for 180 days after leaving the eligible area or after that area is no longer designated a combat zone or after your operation is no longer considered a contingency operation. Second, in addition to the 180 days, the deadline is extended by the number of days that were left for you to take action with the IRS when you entered a combat zone (or began performing qualifying service outside the combat zone) or began serving in a contingency operation. If you entered the combat zone or began serving in the contingency operation before the period of time to take the action began (usually 3.5 months from January – 18 April), your deadline is extended by the entire period of time you have to take the action. Thus, if you were deployed in a qualifying area the for the whole tax filing period, you’d have roughly a 9 ½ month extension (180 days plus 3 ½ months) from the date you left the qualifying area. Click here for information on how to inform the IRS of your deployed status.
Don’t forget to address your state tax deadline! Filing a federal tax return extension does not necessarily mean you get an extension of your of your state tax deadline. Check with your state for their extension process.
The late payment penalty is usually 0.5% of any tax not paid by the regular due date of your return, which is April 18, 2022, for calendar year filers. It’s charged for each month or part of a month the tax is unpaid. The maximum penalty is 25%.
A late filing penalty is usually charged if your return is filed after the due date (including extensions). The penalty is usually 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%. If your return is more than 60 days late, the minimum penalty is $210 (adjusted for inflation) or the balance of the tax due on your return, whichever is smaller.
Whether or not you claim Missouri as your state of legal residence, there are a few things you need to be aware of this tax season since you are stationed here in the Show Me State.
A service member’s state of legal residence determines which state may tax military income. The Service Member’s Civil Relief Act (SCRA) provides that only a member’s state of legal residence may tax their military income. Other income earned by a military member within a state that isn’t their state of legal residence can be taxed by the state where they earned it. For example, a military member stationed here is Missouri, who has a state of legal residence of Virginia, and who works a second job at Wal-Mart, would have his military wages taxed by Virginia, and his wages from Wal-Mart taxed by Missouri. By default, the state from which somebody entered the armed forces is presumed to be their state of legal residence (and the military refers to this initial state as a member’s Home of Record). A member’s state of legal residence (also referred to as their domicile) may be changed to by completing a DD Form 2058 and submitting to your local finance office. See the Where to File / Where am I a Resident handout for more information on determining or changing your state of legal residence.
The Military Spouses Residency Act similarly provides that the income earned by spouses of service members cannot be taxed by a state other than the spouses state of legal residence. However, under this Act the spouse’s state of legal residence must either be (1) the same as that of their service member spouse, or (2) the state in which they are currently residing.
STATE OF LEGAL RESIDENCE OTHER THAN MISSOURI
If a military member’s state of legal residence is not Missouri, and they earned only military income, the military income is not taxed by Missouri, and the member should fill out the No Return Required-Military online form at https://sa.dor.mo.gov/nri/. During the year, Missouri runs reports detailing the names of people with addresses within the state, and who filed Federal income taxes, but did not file pay Missouri taxes. If you do not fill out this No Return Required form, you will most likely receive tax deficiency notices from the State of Missouri for not paying taxes that the state believes you owe. Save yourself the time and hassle no and submit this easy online form.
If a military member’s state of legal residence is not Missouri, but they earned more than $600 in non-military income, this income is taxable by Missouri and they must file a Missouri tax return (Form MO-1040).
Service member spouses who have state of legal residences other than Missouri, and who make more than $600 must still file a Missouri tax return (Form MO-1040), but must include verification of your state of legal residence (such as your tax return for your state of legal residence, current driver’s license, vehicle registration, or voter identification card for that state). To properly not pay Missouri tax, a Form MO-A must also be submitted, which reports both the military pay of the service member and the income of the spouse on Line 9 of Part 1 and marking the military (nonresident) block on Line 10.
STATE OF LEGAL RESIDENCE MISSOURI
If a military member’s state of legal residence is Missouri, and they were stationed here in Missouri during 2018, they are required to file a Missouri tax return (Form MO-1040). However, Missouri Revised Statutes Section 143.174 provides a deduction for military income earned as a member of the active duty component. The amount of military income should be entered on Line 16 of the Form MO-1040 to claim this deduction. However, the service member must also provide a copy of each Leave and Earnings Statement (LES) for the year to verify your entitlement to this deduction. Failing to do this may lead to denial of this deduction. This deduction is not allowed for either state active duty, or inactive duty training.
Similarly, the military pension of military retirees who reside in Missouri is taxable in Missouri, but there is a deduction. Retirees therefore need to file a Form MO-1040 (claiming the pension deduction on Line 8) as well as part 3, section D, of Form MO-A.
Below is an illustration provided by the Missouri Department of Revenue to help military members which form to use in Missouri. You should note, they use the term “Home of Record” to mean state of legal residence or domicile (while your Home of Record usually doesn’t change from the military’s perspective (your HOR is the location up to where the military will pay for you and your household goods to return to when you leave the military), you can change your state of legal residence/domicile during your career as discussed above).
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