SCRA & MSRRA - How does it work on state income tax for guard members?

[FoxtrotNovemberGolf]

Apologies if this has been answered but I couldn't find it via search. I know how it works for those on the AD side, but unsure for guard.

Hypothetical: If one currently lives in a state with 0% income tax and is selected by a guard unit in a state with double digit income tax, can you and your spouse maintain your domicile in the original state? For how long can you do so? Would it just be for the time from when you start (leaving for OTS) through the end of seasoning? Can you extend it indefinitely as long as you maintain full-time/active status? Do you lose it once you are no longer full-time/active status (and is that loss permanent)?

[topdeadcenter]

You pay taxes to the state you have listed as your permanent address. Unless you start working full time as a technician. Someone please correct me if I'm wrong. But, as an anecdot, I moved from one state to another for the guard in 2012 and I still pay taxes to my original state.

[nunya]

1 hour ago, topdeadcenter said:

Someone please correct me if I'm wrong. But, as an anecdot, I moved from one state to another for the guard in 2012 and I still pay taxes to my original state.

I don't think your logic would survive an audit.

The IRS has made examples of airline guys playing loose with residency rules.  Be careful.  

[nunya]

3 hours ago, FoxtrotNovemberGolf said:

Hypothetical: If one currently lives in a state with 0% income tax and is selected by a guard unit in a state with double digit income tax, can you and your spouse maintain your domicile in the original state? For how long can you do so? Would it just be for the time from when you start (leaving for OTS) through the end of seasoning? Can you extend it indefinitely as long as you maintain full-time/active status? Do you lose it once you are no longer full-time/active status (and is that loss permanent)?

Generally once you move, register your cars, and register to vote, you're considered a resident of your new state.  If you commute back and forth, you can keep your tax free.  If you move your life to your new Guard unit, you're on the hook for their taxes.  Sorry, life's a cruel bitch sometimes and taxes are one of her favorite pastimes. 

[FoxtrotNovemberGolf]

14 minutes ago, nunya said:

Generally once you move, register your cars, and register to vote, you're considered a resident of your new state.  If you commute back and forth, you can keep your tax free.  If you move your life to your new Guard unit, you're on the hook for their taxes.  Sorry, life's a cruel bitch sometimes and taxes are one of her favorite pastimes. 

Here's the exact provision: https://www.law.cornell.edu/uscode/text/50/4001

I wouldn't be registering my cars, voting, etc. basically the exact same setup as any active duty person who is domiciled with Texas or Florida (or the others, just these two are the most common since a lot of people domicile at those states during training)(I also know the car registration laws vary state to state in regard to nonresident military members). As the law linked states: "solely in compliance with military orders" there is no other reason as to why I (or my spouse) would be moving to this hypothetical state except for my military orders. I'm fairly certain there are no issues with this while on active orders (for example, during seasoning), but I'm unsure if it all falls apart if you end up in traditional guard status.

Probably best to talk to a tax attorney, but I wanted to see if anyone had experience with this on the guard side.

[brabus]

When I asked this question recently to some bros, the consensus amongst guys who have been in the ARC for a while is you can keep your residence wherever if on active orders (i.e. AGR, on an extended period of MPA, etc.)  If you are other than that, you must have residency/pay taxes in the state you predominantly reside/work in. Full time Tech in state x, well then you better pay taxes to state x. Part time guy in state x, but live/work civilIan job in state y, you pay taxes to state y (mostly). During the training pipeline/seasoning you're under active orders, so you can keep your residency where you want for the time being.

[nunya]

1 hour ago, FoxtrotNovemberGolf said:

Here's the exact provision: https://www.law.cornell.edu/uscode/text/50/4001

I wouldn't be registering my cars, voting, etc. basically the exact same setup as any active duty person who is domiciled with Texas or Florida (or the others, just these two are the most common since a lot of people domicile at those states during training)(I also know the car registration laws vary state to state in regard to nonresident military members). As the law linked states: "solely in compliance with military orders" there is no other reason as to why I (or my spouse) would be moving to this hypothetical state except for my military orders. I'm fairly certain there are no issues with this while on active orders (for example, during seasoning), but I'm unsure if it all falls apart if you end up in traditional guard status.

Probably best to talk to a tax attorney, but I wanted to see if anyone had experience with this on the guard side.

I'm well aware of the benefits available to active duty members and their spouses.  Spent the better part of two decades enjoying those benefits.  Did you know spouses were only recently afforded those protections?  And yep, you get the same benefits for a couple years while you're on active orders.  But once you leave the AD blanket, choose your hometown wisely.  You're just another civilian employee as a DSG or Technician.

Edited May 28, 2017 by nunya

[matmacwc]

You sign a document saying you will become a resident therefore pay the state tax.

[Stoker]

So ART status requires you to accept local residency and this local taxes? Wow, way to make it even less appealing than AGR.

Me, I'm going to do everything I can to keep my no-income-tax-state residency as long as possible.

[Disco_Nav963]

Say I leave active duty to join AFRC under PALACE FRONT. My HOR & SLR are currently Texas, and I move to Louisiana (from North Dakota) using my JTR relocation entitlement for separating from active duty. While on terminal I close on a house in Louisiana, and then join AFRC the day after my DOS. A few weeks later I go on long term MPA orders. 

(1) Is my SLR required to change to Louisiana by virtue of the fact I moved there during a break in AD service?

(2) Does my HOR change from TX by virtue of the fact that I re-entered AD on MPA orders from a residence in LA?

(3) In short, do I gain a LA state income tax liability, either all the time or only for periods when not on orders?

[brabus]

Leave the TX address on your W4. Legal to do so while on MPA. When you come off MPA, you will have to change to LA if you go to an ART job, but can stay TX if you went AGR or other type of AD orders. I wouldn't worry about changing anything over the couple week period you mentioned.