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Old 02-01-2014, 03:08 PM
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State residency and where to file

Hello all! Hope you can help.

I am military stationed in Colorado. I was originally a resident of North Carolina. My wife currently goes to graduate school in NC.

In April 2013 because I was worried about not having a valid license, I got a license in Colorado. Because of the Military Spouse Residency Relief Act (MSRRA) my wife can be whatever state resident that I am.

So my question is:

Having my drivers license and being in Colorado for over two years qualifies me as a Colorado resident, but must I be a Colorado resident or do I have a choice being military and all?

If I decide to be a Colorado resident I am assuming 1 Jan 2013 is my resident start and I will only file for Colorado to keep it simple since I pretty much qualified to be a Colorado resident since I moved here even without the Colorado Drivers license.

I want to just file Colorado to keep it simple. It is annoying having my wife live in totally different state though too and I like filing taxes myself cause its quick.

Thanks!



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Old 02-01-2014, 04:12 PM
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Originally Posted by rluper View Post

#1;Having my drivers license and being in Colorado for over two years qualifies me as a Colorado resident, but must I be a Colorado resident or do I have a choice being military and all?

#2;If I decide to be a Colorado resident I am assuming 1 Jan 2013 is my resident start and I will only file for Colorado to keep it simple since I pretty much qualified to be a Colorado resident since I moved here even without the Colorado Drivers license.

I want to just file Colorado to keep it simple. It is annoying having my wife live in totally different state though too and I like filing taxes myself cause its quick.

Thanks!
#1;I guess it depends; in general, In the US Military, there is a difference between the terms Home of Record,and Legal Residence.HOR and LR may, or may not be the same address. Your HOR is NC, the place yiu were living when you entered the military (or, re-enlisted in the military, if one chooses). HOR is used to determine travel entitlements when one separates from the military. It has nothing to do with voting or paying taxes, registering vehicles, nor any of the other priviledges of state residency.HOR can only be changed if there is a break in service of more than one day, or to correct an error. LR or "domicile", on the other hand refers to the place where you intend to return to and live after discharge or retirement, and which you consider your "permanent home." Legal residency determines what local (state) tax laws you are subject to, and in which local (city, county, state) elections you may vote in.Because military members may have LR in one state, but be stationed in a different state, the Servicemembers Civil Relief Act, allows military members to pay taxes, register vehicles, vote, etc., in their state of LR, rather than the state they are stationed in. This can sometimes result in a tax advantage because several states exempt military pay from state taxes.LR is the place that you intend to live after they separate or retire from the military. It's the place that you consider their permament home.Depending on your service, and local polcies, an active duty you can changeyour LR by visiting your local base legal office and/or base finance office and completing a DD Form 2058, State of Legal Residence Certificate.However, the military is required by regulation to ensure that you are not changing your LR for the sole purpose of obtaining a tax advantage. Therefore, when changing your LR military officials at the legal office (or finance office) may require some degree of proof that you consider the new state to be your "permament home."

The easist proof is "physical presence in the state." If you are currently stationed in a state, and wish to make it your permament home, it's generally pretty easy. If you are not currently stationed in the state you wish to make your permament home, and have never been stationed there, it become much harder. Generally, you need a specific address, not just the state in general. You can show your intentions to become a legal resident by registering to vote in the new state, by titling and registering your car in the new state (notifying your old state of the change), by getting a driver's license in the new state, or by preparing a new last will and testament (indicating your new state as your legal residence). Buying real property in the new state will also reinforce your claim.Unless you can show such clear intentions, the military will probably not allow you to change your LR.Particular care should be taken to ensure your pay records are up-to-date concerning your state of LR.. If incorrect, you may wind up paying taxes to the wrong state, or paying taxes and penalties in more than one state. If you have any doubt about your state of LR, contact your legal assistance office.You may also be required to complete a W-4 form to determine the amount of withholding, or exemption from withholding state taxes.

#2;as mentioned above.



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Old 02-01-2014, 06:39 PM
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-You don't have to be a Colorado resident.
-You do have a choice because you are in the military.
-Changing your state of legal residence by submitting a new DD 2058 will direct the finance office to only withhold state taxes for the proper state (if necessary).

Many military members who enter the service from a state that has a state income tax change their state of legal residence to a state that has no income tax if they happen to be stationed there (primarily Florida, Texas, Nevada and Alaska, but there are several others). They can then remain legal residents of the no-tax state until they leave active duty, thereby avoiding years of having to pay a state income tax.



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Old 02-01-2014, 07:05 PM
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Cool, thanks for the replies. After looking at the requirements and rules. We are filing Colorado. My HOR is still NC but as you mentioned it can be different than residency.

Thanks for the reply!



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