CA Military Spouses

[Nashville]

Looks like the bizarre illustrative example above applies: Texas T-TommyGun's wife works at the five and dime at Camp LeJeune NC, so she, maintaining a Texas residency, is exempt from NC taxes. However, T-Tommy gets a job at the same five and dime, NC gets to tax his pay.

I am in favor of people paying as low taxes as possible, but when is this Santa Claus mentality going to end? With a Trillion Dollar deficit (not just in total, but every year now) who is going to lend the government money so they can earn interest at a whopping 0.25% prime interest rate??

[Snaggletooth]

Without regard to whether the spouse [is, is not] subject to state taxation, what is the responsibility of the employer to withhold? The individual' responsibility and the employer's responsibility is often two different things.

Example: Paula works as a receptionist at Beaver Drilling and Trenching at Edwards AFB in California. Her husband is enlisted in the Air Force. Both she and her husband are from Ft. Wayne, IN and claim Indiana as their home residence. They have maintain Indiana drivers' license and car tags.

Beaver Drilling and Trenching is a commercial contractor, much of their work is done at Edwards. Their payroll system consists of SIT capabilities with two options 1)withhold California tax, or 2)withhold nothing.

The new law now says that Paula is not taxable under California state tax, but she IS taxable under Indiana law. My question: Is Beaver Drilling now responsible for withholding Indiana tax?? I don't believe the New Federal law specifies so, although it does specify that Paula is subject to Indiana tax.

[RLymanC]

Quote:"The new law now says that Paula is not taxable under California state tax, but she IS taxable under Indiana law."

Not so, under the new law she is exempt from all 50 state taxes..Spidell is the CA tax quru, thats why he just deals with CA issues, but the law includes all states.

[Snaggletooth]

..RLyman for clarifying this tenet..

After reading the new law as passed (only three pages), I'm not sure I agree with you, or that I disagree either.

It does state that the spouse cannot be deemed to enter a tax jurisdiction by virtue of the military assignment, but also that the spouse cannot be deemed to LEAVE their domiciled jurisdiction either. If their domiciled state has a state income tax, then it would appear that the service spouse still has a requirement to file and incur tax under that domiciled state...