need to file two resident returns (CT and NJ)

Technical topics regarding tax preparation.
#1
Posts:
986
Joined:
19-Oct-2020 7:38am
Location:
USA
Taxpayer is in military and 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?
Drake software seems not be able to handle this scenario.
Thanks.
 

#2
Posts:
7
Joined:
30-Mar-2021 11:48am
Location:
NY
States generally have special rules for military members. Your client might not be considered an NJ resident(see pages 2 and 3 of the following NJ publication).

https://www.state.nj.us/treasury/taxati ... e/git7.pdf

Nonresidents. If New Jersey was not your home of record when you entered the service, you do not become a
resident of this state when assigned to a duty station here. You are a nonresident for Income Tax purposes. You
will be considered a New Jersey resident only if you establish a permanent home here. The Income Tax Filing
Requirements below will tell you when you are required to file a New Jersey Income Tax return.

You are not considered to be maintaining a permanent home outside New Jersey if you are living:
• Off base, receiving a military housing allowance;
• On base;
• In a barracks;
• In government quarters; or
• Aboard a ship
 

#3
sjrcpa  
Posts:
6563
Joined:
23-Apr-2014 5:27pm
Location:
Maryland
See the start of the discussion here
viewtopic.php?f=8&t=21919&p=186889#p186889
 

#4
HowardS  
Posts:
2864
Joined:
21-Apr-2014 3:12pm
Location:
Southern Pines, NC
Starting two threads for the same client risks losing relevant information.
You may have two part-year returns.
How about providing some dates:
- When did the client enlist? Where is he stationed?
- What was his resident state prior to enlisting? Did he change state of residence after enlisting?
- When did he graduate from college...what state?
HOR and SLR are only relevant during military service. Civilians have other criteria.
Retired, no salvage value.
 

#5
Posts:
986
Joined:
19-Oct-2020 7:38am
Location:
USA
HowardS wrote:Starting two threads for the same client risks losing relevant information.
You may have two part-year returns.
How about providing some dates:
- When did the client enlist? Where is he stationed? --------------enlisted in Sept. 2020. stationed in CT
- What was his resident state prior to enlisting? Did he change state of residence after enlisting? ----------NJ, did not change state of residence
- When did he graduate from college...what state?-----------graduated in April. 2020. college is in PA[
HOR and SLR are only relevant during military service. Civilians have other criteria.


Please see my answers above.
More details: taxpayer lived with his parents all the time in 2020 except going to CT for National Guard duty once a weekend each month.

Thanks!
 

#6
HowardS  
Posts:
2864
Joined:
21-Apr-2014 3:12pm
Location:
Southern Pines, NC
SLR is considered your permanent home, the state where you intend to live after you leave the military. This state is considered your residency for state income tax purposes. The SCRA provides for this.

Refer to this:
https://usacac.army.mil/sites/default/files/documents/sja/legal_residence.pdf

My opinion: If your client was a NJ resident before enlisting, maintains a NJ residency and intends to return to NJ after leaving the service, he is a NJ resident, CT non-resident. He should file as a CT non-resident and get a refund.

Also, from the CT portal:
NONRESIDENT MEMBERS OF THE ARMED FORCES: If your domicile was not Connecticut when you entered the military and you were later assigned to active duty in Connecticut, you do not become a Connecticut resident even if you maintain a permanent place of abode here. You are a nonresident and your military compensation is not subject to Connecticut income tax.
Retired, no salvage value.
 

#7
Posts:
986
Joined:
19-Oct-2020 7:38am
Location:
USA
HowardS wrote:SLR is considered your permanent home, the state where you intend to live after you leave the military. This state is considered your residency for state income tax purposes. The SCRA provides for this.

Refer to this:
https://usacac.army.mil/sites/default/files/documents/sja/legal_residence.pdf

My opinion: If your client was a NJ resident before enlisting, maintains a NJ residency and intends to return to NJ after leaving the service, he is a NJ resident, CT non-resident. He should file as a CT non-resident and get a refund.

Also, from the CT portal:
NONRESIDENT MEMBERS OF THE ARMED FORCES: If your domicile was not Connecticut when you entered the military and you were later assigned to active duty in Connecticut, you do not become a Connecticut resident even if you maintain a permanent place of abode here. You are a nonresident and your military compensation is not subject to Connecticut income tax.


Thanks so much! This is really helpful!
 


Return to Taxation



Who is online

Users browsing this forum: beardenjv, Google [Bot], HowardS, jhanle1948, kyle242gt, nancyaeo, Nilodop, sjrcpa, Tangled Web, Trailman423, UnlicensedTaxPro, Webster and 105 guests