Scott Air Force Base News

Stationed at Scott, living in St. Louis: Potential tax trouble for military members

Imagine this scenario: You are stationed at Scott Air Force Base and live in St. Louis.

Your state of legal residence is neither Missouri nor Illinois. When tax season comes around, you file taxes in your state of legal residence because you thought you were exempt from having to file in Missouri.

If you are stationed at Scott and commute from Missouri, keep a watchful eye on your mailbox.

You may receive a Notice of Adjustment or a Notice of Deficiency from the Missouri Department of Revenue for unpaid Missouri income tax. The notice will indicate you have an outstanding balance due and payable to MODOR.

MODOR has taken the position that if you live on the St. Louis side of the river, you are a legal resident of Missouri and are subject to paying Missouri income tax. It holds this position even if your presence in Missouri is due to your military orders assigning you to Scott.

MODOR has taken the position that if you live on the St. Louis side of the river, you are a legal resident of Missouri and are subject to paying Missouri income tax.

It holds this position even if your presence in Missouri is due to your military orders assigning you to Scott.

Notices of Adjustment and Deficiency for Missouri income tax are being sent to military members who commuted to Scott from Missouri in 2014 and had a Missouri address for more than 183 days, even if they maintained a legal residence elsewhere.

How could this happen?

You thought the Servicemembers Civil Relief Act protected military members from having their pay taxed by a state where he or she is present solely due to military orders when he or she maintains a legal residence elsewhere. It does.

The SCRA states a “servicemember shall neither lose nor acquire a (legal) residence or domicile for purposes of taxation ... by reason of being absent or present in any tax jurisdiction of the United States solely in compliance with military orders.”

However, servicemembers must still comply with the laws of the state where they are legal residents. So if your state of legal residence requires military members to pay income tax even though they are stationed elsewhere, you are still accountable to your state of legal residence. If you are unsure whether your state of legal residence imposes taxes on your military pay and whether you need to file a state income tax return, the legal office has a State Income Tax Guide that can help.

“Legal residence” or “domicile” is established by being physically present in a state with the intent to reside there permanently or indefinitely. Once a servicemember has established “legal residence” or “domicile” in a particular state, he or she may maintain that state as his or her legal residence even when transferred to a duty location in a different state.

However, servicemembers must still comply with the laws of the state where they are legal residents.

So if your state of legal residence requires military members to pay income tax even though they are stationed elsewhere, you are still accountable to your state of legal residence.

If you are unsure whether your state of legal residence imposes taxes on your military pay and whether you need to file a state income tax return, the legal office has a State Income Tax Guide that can help.

Is MODOR improperly labeling you as a legal resident of Missouri?

Contact the legal office if you are:

▪ On active duty assigned to Scott AFB;

▪ Living or recently lived in Missouri; and

▪ You received a notice from the Missouri Department of Revenue.

If you are stationed in Illinois, live in Missouri, maintain a legal residence elsewhere and have received any type of notice from the Missouri Department of Revenue, the legal office wants to hear from you. If this describes your situation, please send an email to 375amw.ja-legaloffice@us.af.mil with the subject line “SCRA MODOR issue.”

This article is intended to provide general information only and not legal advice. If you need legal advice regarding your specific situation, contact the legal office.

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