Active Duty & State taxes

Question:

I'm currently active duty Air Force and have a question about state income tax and DD Form 2058. I am currently stationed in New Mexico, but have kept Connecticut as my legal residence/Domicile (I grew up there, have a drivers license, vote, and have my car registered there; when I commissioned, CT was where I was living/parents house. It's where I "intend" to move back to). Now I've been told that Connecticut waives CT state income tax for military living out of state (like me) by providing us "non-resident status" through a "Group A Exemption" (see this link: https://portal.ct.gov/-/media/DRS/Publications/pubsip/2015/IP201524pdf…). It appears I meet these criteria, but since I am considered a "non-resident", do I become a resident of another state--in this case, New Mexico, where I would owe state income tax? Anyways, my question is in regards to whether I owe state income tax to anyone? Specifically, I'm looking for a legal justification for why I would or would not owe state income tax to any particular state (Whether my domicile, or state I'm currently living in now-NM). In the future, I do not want any particular state to come after me saying I owe income tax (while charging me interest on a late penalty fee). Thanks!

Jim's Reply:

Hmm, that's a very interesting and complex question. I'm no tax professional, I've long used a CPA firm to do my own fairly routine taxes because I'm concerned enough I don't want to make mistakes and mistakes can be easy to make in the IRS arena. I'd have to guess  that you don't owe taxes to any state at this moment but if you want a 'legal justification', you should consult with a tax pro.

  • PS from StatesideLegal:  You can request a low-cost consultation with a local attorney who handles State tax issues from an LRS provider in New Mexico or CT, using the information in our "Find Legal Help" directory. In addition, the IRS maintains a list of federal tax preparers by State that have recognized credentials from the IRS to perform that work, who should also  be able to advise you on the State residency issue.  The IRS list is available here.