MILITARY ALERT: Tax Protections for Military Families
January 11, 2017
LITTLE ROCK - Each year, many active-duty military families are taken advantage of when filing their taxes because they are not aware of the many protections available to them. The Servicemembers Civil Relief Act (SCRA) offers safeguards that include tax deferment and state tax relief for qualifying service members and many of those members have been calling the Attorney General’s office to get more details.
“Military service can put many unexpected stresses on families,” said Arkansas Attorney General Leslie Rutledge. “But the Servicemembers Civil Relief Act is in place to protect them, and it is important for all service members and their families to know the specific protections provided, especially while preparing to file taxes annually.”
The following is additional information on SCRA tax provisions to remind active-duty military service members of protections available to them this tax season:
- State tax relief: The SCRA provides that a nonresident soldier's military income and personal property are not subject to state taxation if the soldier is present in the state only due to military orders. For example, if your state of legal residence is Arkansas and the military sends you to Colorado, you will not have to pay Colorado’s state income tax on military earnings. However, income taxes may be charged on any non-military income earned.
- Tax rates: The SCRA prevents states from using the income earned by a service member in determining a spouse’s tax rate when they do not maintain their permanent legal residence in that state.
- Military spouses residency relief: This SCRA provision extends tax protections to military spouses who meet qualifying factors such as accompanying the service member to a duty station state. Income earned by the non-military spouse while in the duty station state is not subject to taxation in that state.
- Tax deferment: If a service member’s inability to pay their taxes was caused by their military service, service members can defer owed taxes for up to 180 days after release from service.
The IRS provides a Volunteer Income Tax Assistance program, which offers free tax help to military service members. Contact the nearest Armed Forces Legal Assistance Program office if you suspect SCRA rights were violated.
Arkansas military service members, veterans and families should file consumer complaints with the Attorney General’s office on ArkansasAG.gov or by calling (800) 482-8982.
For more information and tips to avoid scams and other consumer related issues, contact the Arkansas Attorney General’s office at consumer@ArkansasAG.gov or (800) 482-8982 or visit ArkansasAG.gov or facebook.com/AGLeslieRutledge.