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Don't Pay State Income Taxes!

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wytee44

Registered User
Here's a little trick I learned back when I was a Yeoman. In most states, you still must pay state income taxes out of your military pay, even though you don't live there (buddy of mine has paid every year even though he hasn't been in Ohio in 10 years). This is based on your "state of legal residence". Some states don't have state income taxes or you're waived if you're in the military (TX, PA, and IL are the ones I'm aware of). However, Florida is also one of these states! And it is very simple to change your "state of legal residence" to Florida once you transfer there. All you have to do is fill out a simple form at the PSD and your info will be given to DFAS. That means more money in your paycheck and you don't even have to file every April.

When I worked in the Admin Office onboard a ship in Hawaii, I would have to say half the crew, in particular the officers, did this whenever they did a tour in Florida. This is NOT a scam and perfectly legal. I'm sure there are plenty of priors who can back me up on this. My buddy certainly can't wait to get to Pensacola in June so he can stop paying. Let me know if you have any questions!
 
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Jeff29

Science Project
In addition to what Mari said, your former state of residence can actually challenge your decision of changing residence if they believe that it is soley for tax purposes. This rarely happens, but you ought to at least make it all look legitimate. Technically, when you change your state of residence, you are claiming that you plan to reside in that state when you leave the military (even though your home of record may be different).
 
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wytee44

Registered User
That's a great point about your "home of record". No matter what, you cannot change this. Most people I helped discharge want to change their HOR because they want to move somewhere different or their parents no longer live there. However, only if you retire after 20 years, the Navy will only pay to ship you and your stuff to your HOR.

As for a state challenging your change, I talked to a JAG about this and although it has happened, it doesn't work based simply on the nature of our job and our freedom to chose whichever state we choose (just don't tell them you're switching to save on taxes!)

As for PSD, don't let any PNs or YNs give you any s**t. I know how they sometimes like to give JOs a hard time because they don't know how it works. If a PN3 or YNSN doesn't seem interested in helping you, don't hesitate to ask for the LPO or LCPO. It's amazing how their attitude will change...
 
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Gator

Registered User
The military will still pay to ship your stuff when you get out, even if it is a different address than your home of record. The catch is that military won't pay the difference if the cost of shipping to the new new address is anymore than if they were shipping to your HOR. When I got out of the Corps it only cost me about $70 more to have my stuff shipped to my new place.
 
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Alex Fowler

Registered User
Slightly OT, does anyone know if your legal residence changes when you go to college? I live in Philly currently but going to Boston College next year. Needless to say I'd much rather pay taxes in Pennsylvania than Massachussetts. Also, are NROTC midshipmen eligible for military tax credits?


Alex

"It's a beautiful day, don't let it get away"-U2
 
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Gator

Registered User
If you live and work in Mass then I think that you will be paying your income taxes their.
 
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