military W2 shows wage from a state (not the SLR)

[tax1111]

Taxpayer graduated from college in 2020 and joined National Guard stationed in CT. His state of legal residence is NJ.
In his w2, however, state wage from CT is listed but not NJ.
Should he have the w2 corrected?
Any other options?
Thank you!

[Bart]

The W-2 appears correct.  

[tax1111]

14 hours ago, Bart said:

The W-2 appears correct.  

Thank you!

It seems that he needs to file CT resident return (home of record) and NJ resident return (state of legal residence).
I have never done this before. How can I generate two resident returns at the same time? Does credit of tax paid to CT offset NJ tax?
My tax software seems not be able to handle this scenario. 
Thanks. 

[Lion EA]

Listen to Possi who has a lot of military clients.

[Hahn1040]

Active duty can maintain their state unless they choose to change.

Ask: did he intend to change?  did they do all of the change residence steps: driver's license, vote, car registration etc.   If he did indeed change, then he would be a part-year NJ and CT. 

CT is not a state that military tend to change to  (FL, TX) .  But he may have his reasons...

If he did not intend to change, then I would file full year NJ. and non-res CT showing taxes withheld in error.  In the future NJ does not tax his militaty pay if he is not in the state.

[tax1111]

3 hours ago, Possi said:

With the military, you file the Home of Record as resident only. 

If the military member ALSO had non-military income from another state, the state where he/she actually resides,  then you would file as a NON-resident for the other state, the one that is NOT his/her HOR. 

It doesn't matter if they own a home in the state where they are living/serving. The HOR supersedes as far as the resident return goes. 

Maybe I am not understanding the situation. 

 

 

Thanks for the help!

Some more details: the taxpayer graduated from college in April 2020 and joined national guard in CT. He has some non military income before he joined the army and he has been NJ resident in the past all the time. 

In this case, should he file NJ part year resident return to report the nonmilitary income and part year CT resident return to report the military income?

Thanks.

Edited May 5, 2021 by jklcpa
moved response to outside of quote box

[tax1111]

3 hours ago, Lion EA said:

Listen to Possi who has a lot of military clients.

Thank you!

[tax1111]

3 hours ago, Hahn1040 said:

Active duty can maintain their state unless they choose to change.

Ask: did he intend to change?  did they do all of the change residence steps: driver's license, vote, car registration etc.   If he did indeed change, then he would be a part-year NJ and CT. 

CT is not a state that military tend to change to  (FL, TX) .  But he may have his reasons...

If he did not intend to change, then I would file full year NJ. and non-res CT showing taxes withheld in error.  In the future NJ does not tax his militaty pay if he is not in the state.

Thanks. 

[Lloyd Hudson]

Original post says that client is active duty GUARD. Probably paid by the state as Guard. Unless, forwarded to federal activation. Then the w-2 would be from DFAS and taxed in state of residence, At least that is the experience  in Arizona. Of course, in Arizona active duty would not be subject to state tax at all.

[tax1111]

2 minutes ago, Lloyd Hudson said:

Original post says that client is active duty GUARD. Probably paid by the state as Guard. Unless, forwarded to federal activation. Then the w-2 would be from DFAS and taxed in state of residence, At least that is the experience  in Arizona. Of course, in Arizona active duty would not be subject to state tax at all.

Thank you!

Yes, the w2 is from DFAS with CT state income listed.

Can you let me know in this taxpayer's case whether CT or NJ should be the state of residence? I said NJ is the SLR in my OP but after feedbacks from this forum, I am not sure now. 

 

[Possi]

Here is the question; When TP graduated college, did he then begin working in CT before joining the military in CT? 

If so, then the military might have deemed CT his HOR. But, as @HAHN1040 stated, TP can keep NJ as long as he didn't actually change his tax home.

If not,  then file the NJ resident return and file the CT as a non-resident. 

I have a feeling that the TP began working and living in CT after college, and the military determined his HOR for him, OR it was an error that needs to be changed.

Sorry to have dropped the ball on this. I'm traveling and if I access the site from my phone, I'm another person. I popped in on my home computer remotely to respond. 

So, if you see..... like.... Cher... it's just me. 

[tax1111]

5 hours ago, Possi said:

Here is the question; When TP graduated college, did he then begin working in CT before joining the military in CT? 

If so, then the military might have deemed CT his HOR. But, as @HAHN1040 stated, TP can keep NJ as long as he didn't actually change his tax home.

If not,  then file the NJ resident return and file the CT as a non-resident. 

I have a feeling that the TP began working and living in CT after college, and the military determined his HOR for him, OR it was an error that needs to be changed.

Sorry to have dropped the ball on this. I'm traveling and if I access the site from my phone, I'm another person. I popped in on my home computer remotely to respond. 

So, if you see..... like.... Cher... it's just me. 

Thanks, Possi, for taking the time to answer my questions during your travel. 

I need to check with the client about more details. But as far, he told me that he lived with his  parents in NJ most of 2020 only travel to CT one week each month from Sept 2020 when he joined National guard. I understand that in such case, he should be treated as CT nonresident and NJ resident. 

Also, it seems that CT does not tax military income from nonresident. So, even though the w2 shows CT income, I need to override it to 0 on tax software.

Thanks all!