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How to tax income while in military.

taxu2
Level 5

Client's home state is IL. He is on military orders in PA. His income is W2 from Army and rental house in IL. Spouse has IL income and PA income. IL does not tax military income and he can use his home state for tax purposes. I believe the spouse can as well, but she did pay taxes into PA on her W2. Would I do IL tax return and PA non resident? Wasn't sure if anyone was familiar with military taxes or not. Any guidance is greatly appreciated. 

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2 Comments 2
dascpa
Level 11

find out his "state of record".  That's the state he declared upon entering the military.  Then look at that state and the state he earned income to see their rules.  Many states also have spousal income rules.  There is a military organization that has an online state by state guide.  Military returns can be problematic, especially when spouse's are non-military.

Dusty2
Level 7

PA will tax her income.