State of legal residence for active duty

2014-08-18T10:26:54-04:00

This is more for active duty legal specialists. What's behind switching state of residence? I know quite a few members who switched theirs for the sake of not paying state taxes. So what happens when they return to their home state after 20 years, do they pay back taxes?

Also objectively speaking how fair is it that being a federal military 'employee', some pay state taxes while others don't, while serving in the same pool of crap together? Help me figure out this 'pool of crap'

Response by 1SG Private RallyPoint Member made Aug 18 at 2014 10:29 AM

2014-08-18T10:29:36-04:00

All of those that I have known in my 15+ years that changed, were only for not paying taxes. You would not have to pay back taxes if you decided later on to switch back. And to the point of some paying taxes and some not while on active duty, it just depends on what you want from the specific state. I will gladly continue to pay the VA state taxes for some of the added perks after retirement of being a resident.

Response by LTC Paul Labrador made Aug 18 at 2014 10:51 AM

2014-08-18T10:51:45-04:00

Mostly for tax purposes.

Response by MAJ Private RallyPoint Member made Sep 23 at 2014 7:19 AM

2014-09-23T07:19:39-04:00

My Home of Record state was NC and has one of the highest tax rates. My (now-ex) wife was from PA, which did not tax military not serving in the state. I changed my legal residence to PA to avoid it. I feel no guilt about that.

I think military pay and benefits should be tax free anyway.

Response by SGT Joshua James made Sep 23 at 2014 12:45 PM

2014-09-23T12:45:24-04:00

Buddy, when i finished my job training in the Army, i went to texas, claimed resident status, and then went to my duty station in Korea.

Do not feel guilty, be wise and work the system to the best of your ability so you can keep more of your paycheck.

They knew i was in the Army, they knew what i was doing when i wanted thr ID. They asked me if i have "INTENT" to return to texas when i was done with active duty. I said yes, but guess what... it did not work out that way. In fact, i only set foot in texas once more in 10 years.

Response by CW2 Private RallyPoint Member made Sep 23 at 2014 1:37 PM

2014-09-23T13:37:59-04:00

I have been a Minnesota resident my entire life and do not plan on changing it. They do not tax military, I somehow qualify for a state refund every year, and my drivers license does not expire until I leave active duty.

Response by SGM Private RallyPoint Member made Oct 26 at 2014 6:16 PM

2014-10-26T18:16:27-04:00

P01 Dronzin, will leave the final answer up to lawyers; that said, used to be you could submit a form to change your state of residence for tax purposes (most commonly at reenlistment)..and you should, if audited meet the tests of residency--register to vote, driver's license, etc. It's now more difficult to do since 9-11 without an "actual" address but people still do it to avoid taxes or simply change when the are stationed in a state without state income tax. On another side, you are a state citizen as well as a US Citizen; your state from which you enlisted may offer you state veterans' benefits, and some have their own tax exemptions, which you might lose if you change states. Under the concept of state's rights, each state taxes differently, that's the law, not crap.

Response by SGT Private RallyPoint Member made Oct 26 at 2014 9:17 PM

2014-10-26T21:17:04-04:00

I was born and raised in FL. I actually joined the military out of GA though. When I joined, I gave up my apartment and since I didn't have anywhere else to claim I used my parents address as my permanent residence.

Response by SFC Melker Johansson made Oct 27 at 2014 10:20 AM

2014-10-27T10:20:44-04:00

I temporary lived in Virginia when I joined the Army. I ended up having to pay VA taxes for almost ten years despite having no permanent ties to that state and with no intentions to return. As soon as I PCS'd to Texas, I bought a house there and changed my legal residency. While I have now PCS'd elsewhere, I do plan to return to Texas upon my retirement.

I do feel it was unfair to me to have to pay VA taxes for ten years only because I was temporary residing there for a year before joining the Army.

Response by SFC William Swartz Jr made Oct 27 at 2014 10:33 AM

2014-10-27T10:33:58-04:00

Ahhhh yes taxes, one of the main reasons I moved across the state line to Alabama when I retired from Ft. Benning..Georgia taxes retirement pay while Alabama does not!! Was a Florida resident from birth until I became a resident of Alabama in February, enjoyed not having state income taxes to pay as well as having a driver's license that did not expire as long as I was AD. Like everyone here has already stated, most, if not all, change to not pay state income taxes and then switch back or to a different state upon their leaving service. Why not use the system as it is set up to take advantage?! Still working on my son to switch his from GA to FL so he's not paying and doesn't have to worry about filing each year, since he has a FL drivers license he should only have to go to S-1 to initiate the change up through finance.

Response by 1SG Frank Boynton made Oct 28 at 2014 4:33 PM

2014-10-28T16:33:54-04:00

I know this, community property states, like Colorado will tax you as long as you list them as your home of records, regardless of your status. I spent 20 years fighting that system, then retired. I had wished I'd changed my residency after my first PCS out of Ft. Carson, but I was dumb. I never intended to go back to Colorado, and I haven't. Louisiana does not tax active duty military or retirees. It is perfectly legal to change your state of residence, as long as you are not living in the state your changing from. If you pay rent or purchase a house in another state, you may legally claim that state as your state of residence, without any obligation to your original state. If after you retire you end up back in your original state, they have no legal grounds to ask you to pay them for the years you claimed another state as your legal residence.

Response by SGT Kristin Wiley made Nov 17 at 2014 2:22 PM

2014-11-17T14:22:25-05:00

I switched mine to Alaska when my parents moved up there. I have no reason to return to my original state of residency. Problem solved.