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Department of Taxation and Finance

Information for military personnel & veterans

Is my military pay subject to New York State and City income taxes?

  • If you are a New York State resident and your permanent home (domicile) was in New York State when you entered the military but you were assigned to duty outside the state, you are still a New York State resident. Your military pay is subject to New York State income tax to the same extent it is subject to federal income tax.
    • If you are a New York State resident required to file a return, use Form IT-201, Resident Income Tax Return.
  • If your permanent home (domicile) was in New York State when you entered the military but you meet the conditions for nonresident status (of either Group A or Group B), your military pay is not subject to New York State income tax.
    • If you meet the conditions for nonresident status, and are required to file a New York State income tax return, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return.
  • If your permanent home was not New York State when you entered the military but you were assigned to duty in New York State, you do not become a New York State resident even if you have a permanent place of abode here. You are a nonresident and your military pay is not subject to New York State income tax.
    • If you are a nonresident and are required to file a New York State income tax return, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return.

If you are a nonresident, other income that you receive from New York State sources (including your spouse's income) may be subject to tax. See Publication 361.

These rules apply for both New York City and Yonkers income tax purposes.

Military spouses

The federal Servicemembers Civil Relief Act (SCRA), as amended by the Military Spouses Residency Relief Act and the Veterans Benefits and Transition Act of 2018, provides for certain tax benefits to military spouses. These benefits include possible exemption from New York State personal income tax withholding, income excluded from New York State source income, and an election for military spouses to use the same state of legal residence as the servicemember for state income tax purposes. For additional information on these benefits, and to determine if you qualify, see the following:

When do I have to file?

  • April 15, 2020
  • June 15, 2020, if you are stationed in a foreign country when your return is due
  • For combat zone extensions, see Publication 361.

Combat zone pay

Military pay received for active service as a member of the armed services of the United States in an area designated as a combat zone is exempt from New York State, New York City, and Yonkers taxes. You are entitled to a New York subtraction modification in computing your New York adjusted gross income for the amount of combat pay included in your federal adjusted gross income.

New York State organized militia

The New York State organized militia includes the New York Army National Guard, the New York Air National Guard, the New York Naval Militia, and the New York Guard.

If you are a member of the New York State organized militia, you are entitled to a New York subtraction modification in computing your New York adjusted gross income (AGI) if:

  • Your federal AGI includes any pay received as a member of the New York State organized militia for performing active service within New York State due to:
    • state active duty orders issued under New York Military Law section 6.1, or
    • active service of the United States pursuant to federal active duty orders, for service other than training, issued under United States Code Title 10.

However, income received for regular duties in the organized militia (for example, pay received for the annual two-week training program) does not qualify for this subtraction modification.

Military pensions

Pension payments received by retired military personnel or their beneficiaries are totally exempt from New York State, New York City, and Yonkers income taxes.

Publications and guidance

  • TSB-M-10(1)I, Military Spouses Residency Relief Act
  • TSB-M-19(3)I, Veterans Benefits and Transition Act of 2018
  • Publication 361, New York State Income Tax Information for Military Personnel and Veterans - Provides information about NYS resident and nonresident status and explains how to file your NYS income tax return.
  • IRS Publication 3, Armed Forces' Tax Guide - An IRS publication that covers the special federal tax situations of active members of the U.S.
  • IRS Publication 525, Taxable and Nontaxable Income - An IRS publication that includes federal tax information on military pensions and veterans' benefits.
  • N-08-05, Important Information for Veterans Receiving Payments Under the Compensated Work Therapy Program

Links

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