The following instructions are for military personnel filing a Utah income tax return:
- Am I a Utah resident?
- Is my military income taxed?
- Serving in a combat zone
- What if my spouse is a Utah resident and I am a nonresident on military orders?
- What if my spouse receives income in Utah?
- Sample calculation for nonresidents
- Military Pay and Military Spouse Income
- Utah Tax Information for Members of the U.S. Armed Forces
- Pub 57, Military Personnel Instructions
Utah residents in the military do not lose their Utah residency or domicile solely by being absent from Utah due to military orders. They must file a Utah income tax return reporting all income, regardless of the source. If tax must be paid to another state on non-military income, Utah allows a credit for taxes paied to the other state. See Credit for Income Tax Paid to Another State for more information. If claiming this credit, complete and attach form TC-40S, Credit for Income Tax Paid to Another State.
Residents of other states (Utah nonresidents) stationed in Utah solely due to military orders are not subject to Utah tax on their military pay. However, nonresident military personnel residing in Utah and receiving income from Utah sources (other than active duty military pay), must file a Utah income tax return and pay any tax due on that other income. See Pub 57, Military Personnel Instructions.
Active duty military pay is only taxable in the state where a service member is a resident. Non-residents of Utah with Utah sources of income other than their active duty military pay must file and pay Utah taxes on their Utah source income but may subtract their active duty military pay.
Military personnel deployed to a combat zone or overseas contingency operation can receive additional tax relief. See Utah Tax Information for Members of the U.S. Armed Forces for information about combat zone tax relief, including how to notify the Tax Commission of your deployment.
If one spouse is a full-year Utah resident and the other spouse is a full-year nonresident, the couple may file separate Utah tax returns, even though they file a joint federal tax return. If either spouse is a part-year resident, the couple cannot file using these special instructions, but must file using the same filing status on both their federal and Utah returns.
When one spouse is a full-year Utah resident and the other spouse is a nonresident:
- If you file separate federal returns, you must file separate Utah returns.
- If you file a joint federal return, you may choose to either file:
- A joint Utah return which includes all income of both spouses as reported on your federal return; or
- Separate Utah returns following the instructions in Pub 57, Military Personnel Instructions.
The nonresident spouse of a nonresident active military service member may be exempt from Utah tax on all income received in Utah if certain conditions are met. See Military Pay and Military Spouse Income for more information. This income is still taxable for federal purposes and may be taxed in the state of residence.
To exclude the exempt income from the Utah return, make these subtractions:
- For the nonresident military service member, deduct the active duty military pay on TC-40A, Part 2, using code 82.
- For the nonresident spouse of a nonresident military service member filing a joint return, deduct the spouse's total income from all sources on TC-40A, Part 2, using code 88.
Income that is taxable in Utah would then include:
- All income of a resident service member, including military pay;
- All income of a resident spouse; and
- Any income earned or received from Utah sources while stationed in Utah by the nonresident service member, other than active duty military pay.
If the military service member and spouse are both nonresidents of Utah and had the same domicile in another state before moving to Utah under military orders, their Utah taxable income is computed as follows:
|Utah Income for Nonresident Military Service Member and Spouse|
|1. Active duty military pay earned by nonresident service member 1||$25,000|
|2. Other Utah income earned or received by service member||$5,000|
|3. Spouse’s total income 2||$15,000|
|4. Total income – add lines 1 through 3||$45,000|
|a. Nonresident service member active duty military pay from line 1 1||-$25,000|
|b. Nonresident spouse's total income from line 3 2||-$15,000|
|6. Total deductions – add lines 5a and 5b||-$40,000|
|7. Income taxable in Utah – subtract line 6 from line 4||$5,000|
1. The active duty military pay of a nonresident service member on line 1 is deducted on TC-40A, Part 2, using code 82.
2. The total income of a nonresident spouse on line 3 is deducted on TC-40A, Part 2, using code 88.
The only income taxed for the nonresident couple is the Utah income earned by the service member from his non-military employment.