My home state is Pennsylvania but I'm stationed in Nebraska for active duty. Where do I pay tax?

My home state is Pennsylvania but I'm stationed in Nebraska for active duty. Where do I pay tax?

by Timothy Brezinsky, CPA | Jan 11, 2018

I am an active military member, and my home state is Pennsylvania. I bought a house in Nebraska, and am currently stationed there. What state tax do I need to pay on my income, if any?

The federal Servicemembers Civil Relief Act (SCRA) provides that compensation of a servicemember for military service can only be taxed by the state in which the servicemember has his or her legal residence. Therefore, the compensation would be taxable in Nebraska if you are a resident of Nebraska.

Compensation earned by residents of Pennsylvania in the armed forces serving on active duty outside of Pennsylvania is not taxable as compensation in Pennsylvania. Any other income, however, remains taxable and reportable. If you are still a Pennsylvania resident and received total Pennsylvania gross taxable income in excess of $33, you must file a Pennsylvania return. Check out this PICPA CPA Now blog on the topic.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Timothy Brezinsky, CPA, is a senior manager with Tubiello-Harr & Associates LLC in Coopersburg, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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