Nonresident Military Service Members and Spouses
A recent federal law provides an exemption from state income
tax for any servicemember's spouse, who is present in a state
solely due to the orders of the servicemember, and is not a
resident of that state. Also, under Ohio law, the military
income of nonresident servicemembers stationed in Ohio is not
subject to income tax. These issues are explained below:
Military Nonresident Spouses
An amendment to the Servicemembers Civil Relief Act,
effective Nov. 11, 2009 for tax years beginning Jan. 1, 2009
and later, extends the principle of domicile applied to
servicemembers to the spouses of servicemembers. The
amendment states that the spouse of a servicemember, who is
domiciled in the same tax jurisdiction as his/her military
spouse and is residing in a tax jurisdiction solely due to
the military orders of his/her spouse, is excluded from
taxation by that jurisdiction on income earned for services
performed or from sources within the jurisdiction. However,
the servicemember and spouse may be liable for income tax in
their state of residency.
If you are a nonresident military spouse residing in Ohio who
had Ohio income tax withheld and who claims exemption from
Ohio income tax under the 2009 amendment to the
Servicemembers Civil Relief Act, you should file an Ohio
income tax return and claim a refund. The Department of
Taxation may request proof of your eligibility for the
exemption in subsequent correspondence.
To avoid a tax assessment based on an filing address on a
federal return, military nonresident spouses are strongly
encouraged to complete and file an IT 10 form annually when they file their
federal return. Military spouses may also file an exemption
from withholding IT
MIL-SP form with their Ohio employers. Please be advised
that this form asks spouses to provide a copy of their
military ID card as verification of status; this is specifically authorized by the Department
of Defense.
Please note, however, that Ohio-domiciled
spouses of service members who reside with their spouses
outside Ohio are presumed to retain their Ohio domicile.
These spouses remain subject to Ohio state income tax and
school district income tax, if their domicile is within a
taxing school district.
Military Nonresident Service Members
If your state of legal residence as shown in your military
personnel record is not Ohio, you are a military nonresident
and are not subject to Ohio income tax or school district
income tax on your military pay, but are subject to tax on
non-military income earned in Ohio. Military nonresidents are
strongly encouraged to complete and file an IT 10 form annually when they file their
federal return to avoid an Ohio tax assessment.
Therefore, if you are a military nonresident stationed in
Ohio, you may not have to file an Ohio income tax
return if you have no Ohio income other than your military
compensation.
To avoid a tax assessment based on an Ohio filing address on
a federal return, military nonresidents are strongly
encouraged to complete and file an IT 10 form annually when they file their
federal return.
However, you will have to file an Ohio income tax
return if any of the following applies to you: (a) you earned
compensation in Ohio other than as a service member; or (b)
you had income from other Ohio sources such as (i) rental
income from Ohio property, (ii) capital gains from the
sale of Ohio property, (iii) Ohio Lottery Commission prizes
and awards, or (iv) income from a pass-through entity doing
business in Ohio.
Congress passed the Service Members Civil Relief Act in
December 2003. It forbids any state from using military pay
to calculate the household tax bracket of a nonresident
service member or spouse. This act is discussed in more
detail in Information Release IT 2008-02. This release also applies to
the current taxable year.
The military automatically withholds state taxes for the
state of legal residence, e.g., the home of record from where
the servicemember entered the military, that is noted in
his/her military personnel record. This does not change
unless a servicemember takes action to change it, and this
change is approved by the military. Service members can only
make such a change by submitting Department of Defense form
DD-2058; the approved form will be placed in his/her military
personnel record.
For additional general information, see "Military Personnel
Stationed Outside Ohio" on page 14 of the
2011 Ohio income tax
instructions. (Note: the
instructions for Line 36 on page 24 apply to military
nonresidents.)
You can locate any necessary forms and instructions on our
Web site by visiting Tax
Forms.
What to Do If You
Receive a Billing Notice
If you are a nonresident service member whose only income
during the taxable year was military pay, and you receive a
billing notice for that year, please return the notice with
the following information:
- a completed IT 10 showing that you — or if filing
jointly, you and your non-military, non-resident spouse — are
not liable for Ohio taxes for the taxable year; and
- a copy of your leave and earnings statements for January
and December of the taxable year.
Have questions?
Additional details concerning military tax issues are
discussed in our Frequently Asked Questions - Military.
You can reach us by e-mail at Military-Info@tax.state.oh.us.
Our toll-free number for individual taxpayer inquiries is
(800) 282-1780, and the toll-free number for forms is (800)
282-1782.