Military Financial Advice - Military Times

Navigate your state (I – M)

Below is a state-by-state guide with general information on filing your state income tax return for 2006. For more information, see the Web sites or call the phone numbers listed for each state.

Idaho

State Tax Commission

Taxpayer Services

P.O. Box 36

Boise, ID 83722-0410

(208) 334-7660

(800) 972-7660 (outside Boise)

Forms: (888) 228-5770

Refund: (208) 364-7389; (888) 228-5770

Web site: www.tax.idaho.gov

Military income exemptions: Active-duty income is only taxable for Idaho residents stationed in Idaho. Otherwise, generally follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Taxed for Idaho residents and individuals who continue to reside in Idaho longer than 30 days from the date of separation from active duty.

Retired pay/survivor benefits: Deduction available for those age 65 and older or if disabled and age 62 or older.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income greater than $2,500 from an Idaho source, he may be required to file Form 43.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 7.8 percent

Deadline: April 16

Illinois

Illinois Department of Revenue

Taxpayer Correspondence

P.O. Box 19044

Springfield, IL 62794-9044

(800) 732-8866

(217) 782-3336

Forms: (800) 356-6302

Web site: www.tax.illinois.gov

Military income exemptions: Does not tax active-duty military income. See Illinois Tax Publication 102, “Illinois Filing Requirements for Military Personnel,” for details.

Exit bonuses/separation pays: Not taxed. Attach military W-2. See Illinois Tax Publication 102, “Illinois Filing Requirements for Military Personnel,” for details.

Retired pay/survivor benefits: Not taxed.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from an Illinois source, he is required to file Illinois Form IL-1040 and Schedule NR.

Permits separate returns even if a joint federal return is filed? Only if one spouse is a nonresident or part-year resident.

Maximum tax rate: 3 percent flat tax

Deadline: April 16

Indiana

Indiana Department of Revenue

Taxpayer Services Division

Indiana Government Center

100 N. Senate Ave.

Indianapolis, IN 46204

(317) 232-2240

Forms by phone: (317) 615-2581

Forms by fax: (317) 233-2329

Forms by e-mail: pfrequest@dor.in.gov

Refund: (317) 233-4018

Web site: www.in.gov/dor

Military income exemptions: Up to $2,000 of military income is excluded.

Exit bonuses/separation pays: Follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Retired pay/survivor benefits: Follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from an Indiana source, he will be required to file Indiana Form IT-40PNR.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 3.4 percent

Deadline: April 16

Iowa

Iowa Department of Revenue

Taxpayer Services

P.O. Box 10457

Des Moines, IA 50306-0457

(800) 367-3388; (515) 281-3114 (Des Moines or out of state)

Refund: (515) 281-4966 (out of state); (800) 572-3944 (in state)

E-mail: idr@iowa.gov

Web site: www.state.ia.us/tax

Military income exemptions: There is an Iowa income tax exemption for active-duty Guard/reserve pay received for service performed on or after Jan. 1, 2003, in Operation Iraqi Freedom, Operation Noble Eagle or Operation Enduring Freedom. Otherwise, follows federal tax rules. See IRS Publication 17 and IRS Publication 3. For more details on the responsibilities of military personnel, go to www.state.ia.us/tax/1040EI/GenInfo /06Military.html.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Up to $12,000 of retirement benefits excluded for married filers and up to $6,000 for other filing statuses and for those 55 and older, disabled or the surviving spouse of a qualifying person. Otherwise, follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income of more than $1,000 from an Iowa source, he must file Iowa forms IA1040 and IA126.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 8.98 percent

Deadline: April 30

Kansas

Kansas Department of Revenue

Tax Assistance

Docking State Office Building

Room 150

915 S.W. Harrison St.

Topeka, KS 66612

(785) 368-8222

Forms: (785) 296-4937

Fax: (785) 291-3614

Refund: (800) 894-0318

E-mail: tax@kdor.state.ks.us

Web site: www.ksrevenue.org

Military income exemptions: If you are an enlisted member, warrant officer or commissioned warrant officer and you serve in a combat zone during any part of any month, your military pay for that month is excluded from your taxable income. You can also exclude military pay earned while you are hospitalized as a result of wounds, disease or injury incurred in the combat zone. Commissioned officers’ exclusions are limited. See “Kansas Income Tax Instructions for Armed Personnel.” Otherwise, follows federal tax rules. See IRS Publication 17.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Not taxed.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Kansas source, he may be required to file Kansas Schedule S, Part B.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 6.45 percent

Deadline: April 15

Kentucky

Kentucky Department of Revenue

Taxpayer Assistance

200 Fair Oaks Lane

Frankfort, KY 40602

(502) 564-4581

Fax: (502) 564-3875

Forms: (502) 564-3658

Refund: (502) 564-1600

Web site: www.revenue.ky.gov

Military income exemptions: The Kentucky Legislature in 2006 exempted all income earned by soldiers killed in the line of duty for the year of death and the year prior to the year of death. The income exclusion applies to income from sources of the decedent, not just military income. The exclusion includes all federal and state death benefits payable to the estate or any beneficiaries. Otherwise, follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Not taxed. If retired after 1997, subject to Schedule P taxation if amount exceeds $41,110. See Kentucky Schedule P.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Kentucky source, he may be required to file Kentucky Form 740-NP.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 6 percent

Deadline: April 16

Louisiana

Louisiana Department of Revenue

P.O. Box 3440

Baton Rouge, LA 70821-3440

(225) 219-0102

Forms: (225) 219-2113

Refund: (888) 829-3071; (225) 922-3270 (Baton Rouge area)

Web site: www.rev.state.la.us

Military income exemptions: Louisiana residents who served in the armed services may be able to exempt military compensation earned outside Louisiana. If you and/or your spouse served 120 or more consecutive days out of state, up to $29,999 of compensation paid by your branch of the armed services is exempt from Louisiana income tax.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Not taxed.

Accepts computer forms? Yes

Allows electronic filing: Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Louisiana source, he may be required to file Louisiana Form IT-540B.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 6 percent

Deadline: May 15

Maine

Maine Revenue Services

24 State House Station

Augusta, ME 04333-0024

(207) 287-2076

Fax: (207) 624-9694

Forms: (207) 624-7894

Refund: Status available online

Web site: www.maine.gov/revenue

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Can deduct up to $6,000. Otherwise, follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Maine source, he may be required to file Maine 1040-ME with Schedule NR or NRH.

Permits separate returns even if a joint federal return is filed? Yes, under certain circumstances. If one or both filers are nonresidents and only one has Maine-source income, the taxpayer can file as a single individual using Maine Schedule NRH.

Maximum tax rate: 8.5 percent

Deadline: April 17

Maryland

Comptroller of Maryland

Revenue Administration Center

Annapolis, MD 21411

Central Maryland: (410) 260-7980

Others: (800) 638-2937

Refunds: (410) 260-7701 (central Maryland); (800) 218-8160 (others)

Web site: www.marylandtaxes.com

Military income exemptions: Up to $15,000 of military pay may be excluded if attributable to service outside the U.S. or its possessions (this exclusion does not apply if your total military income exceeds $30,000); otherwise, follows federal tax rules. See IRS Publication 17.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Up to $5,000 of most military retirement pay is exempt. To claim the benefit, complete Form 502. Some military retirement pay also may be excluded for those who are 65 or older or totally disabled.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Maryland source, he may be required to file Maryland Form 502 or 505.

Permits separate returns even if a joint federal return is filed? Only if spouses have different taxing periods or areas.

Maximum tax rate: 4.75 percent for residents; 6 percent for nonresidents

Deadline: April 17

Massachusetts

Department of Revenue

P.O. Box 7010

Boston, MA 02204

(617) 887-6367

Toll-free in Massachusetts: (800) 392-6089

Web site: www.mass.gov/dor

Check refund status: www.mass.gov/dor

Military income exemptions: Follows federal tax rules. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Not taxed.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Massachusetts source, he may be required to file Massachusetts Form 1-NR/PY.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 5.3 percent

Deadline: April 17 with the IRS Center in Andover

Michigan

Michigan Department of Treasury

Lansing, MI 48922

(517) 373-3200

Forms: (800) 827-4000

Refund: (800) 827-4000; hearing impaired, (517) 636-4999

E-mail: treasindtax@michigan.gov

Web site: www.michigan.gov/taxes

Military income exemptions: Compensation paid for military service in the armed forces is exempt from Michigan income tax and is deductible from adjusted gross income to the extent it is included in federal adjusted gross income.

Exit bonuses/separation pays: Exempt.

Retired pay/survivor benefits: Retired pay is exempt. Survivor benefits are exempt if the amounts are exempt from federal income tax or classified as military compensation or military retirement pay. Military retirement benefits that pass to the spouse of a deceased member of the military are exempt. Retirement benefits passing to other beneficiaries are taxed.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Michigan source, he may be required to file Michigan Schedule NR.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 3.9 percent flat tax

Deadline: April 16

Minnesota

Minnesota Department of Revenue

Individual Income Tax Division

Mail Station 5510

St. Paul, MN 55146-5510

(651) 296-3781

Refund: (651) 296-4444

Email: indinctax@state.mn.us

Web site: www.taxes.state.mn.us

Military income exemptions: Exempt for active-duty services performed outside Minnesota. Minnesota residents serving on federal active duty are allowed a subtraction of their active-duty military pay, to the extent it is federally taxable, for the time they are stationed outside of Minnesota. If your federal active-duty pay for services performed outside Minnesota is the only income you received, you are not required to file a Minnesota return.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: Follows federal tax rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Minnesota source, he may be required to file Minnesota Form M1 and M1NR.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 7.85 percent

Deadline: April 16

Mississippi

State Tax Commission

P.O. Box 1033

Jackson, MS 39215-1033

(601) 923-7000

Forms: (601) 923-7000

Refund: (601) 923-7801

Web site: www.mstc.state.ms.us

Military income exemptions: $15,000 for Guard/reserve pay. Combat pay and hazardous-duty pay for active service below the grade of commissioned officer are excluded.

Exit bonuses/separation pays: Follows federal tax rules. See IRS Publication 17.

Retired pay/survivor benefits: Retired pay is exempt after Jan. 1, 1994. The exemption also is available to the spouse or other beneficiary at the death of the primary retiree. Widows’ pensions received from VA are not taxable.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Mississippi source, he may be required to file Form 80-205.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 5 percent

Deadline: April 16

Missouri

Department of Revenue

Division of Taxation and Collection

Individual Income Tax

P.O. Box 2200

Jefferson City, MO 65105-2200

(573) 751-3505

Fax: (573) 751-2195

Forms: (800) 877-6881

Refund: (866) 433-7259; (573) 526-8299

Web site: www.dor.mo.gov/tax

Military income exemptions: Combat pay not otherwise excluded from federal adjusted gross income may be subtracted when determining Missouri taxable income.

Exit bonuses/separation pays: Follows federal tax rules. See IRS Publication 17.

Retired pay/survivor benefits: For individuals with a modified state adjusted gross income of less than $25,000 or a married couple with a combined income of less than $32,000, a government pension exemption of up to $6,000 is allowed. If a husband and wife each receive a government pension, each can qualify for an exemption of up to $6,000. Survivor Benefit Plan benefits are taxed according to federal rules.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income greater than $600 from a Missouri source, he may be required to file Form MO-1040 with MO-NRI.

Permits separate returns even if a joint federal return is filed? No

Maximum tax rate: 6 percent

Deadline: April 16

Montana

Montana Department of Revenue

P.O. Box 5805

Helena, MT 59604-5805

(406) 444-6900

Fax: (406) 444-6642

Web site: www.mt.gov/revenue

Military income exemptions: Military income received under Title 10 is fully exempt. The Guard/reserve pay received under this title is also exempt. Guard/reserve pay received under Title 32 is fully taxable. A copy of military orders must be attached to the return if the taxpayer is claiming exempt income. Otherwise, federal tax rules apply. See IRS Publication 17 and IRS Publication 3.

Exit bonuses/separation pays: Follows federal tax rules.

Retired pay/survivor benefits: If federal adjusted gross income is less than $30,000, the first $3,600 of retirement benefits is fully excludable. Exclusion is phased out at $2 for every $1 earned for federal adjusted gross income between $30,000 and $31,800. If federal adjusted gross income exceeds $31,800 ($33,600 for a married couple filing jointly), retirement benefits are fully taxable. Survivor benefits are taxed following federal tax rules. Benefits paid to survivor as pension and designated as such on Form 1099-R qualify for retirement exclusion.

Accepts computer forms? Yes

Allows electronic filing? Yes

Nonresident filing: If the military nonresident has nonmilitary income from a Montana source, he is required to file Montana Form 2.

Permits separate returns even if a joint federal return is filed? Yes

Maximum tax rate: 6.9 percent

Deadline: April 16