Information for military personnel and veterans

Rules for all taxpayers

To determine if you are a New York State resident for income tax purposes, you must consider where your domicile was and where you maintained a permanent place of abode during the tax year.  For more information, see income tax definitions to determine your resident status.

However, these rules may not apply if you (or your spouse) elect different resident statuses under the federal Servicemembers Civil Relief Act (SCRA).

Once you have determined your resident status, click on the corresponding link to learn which New York State return, if any, is required:

• Filing information for New York State residents
• Filing information for New York State part-year residents
• Filing information for New York State nonresidents

Election for servicemembers and their spouses

New York State conforms to the Servicemembers Civil Relief Act (SCRA). For tax years 2023 and after, if you are a servicemember, you and your spouse may each elect to use any of the following:

• your residence or domicile
• the residence or domicile of your spouse
• your permanent duty station

Note: This election is for any tax year of the marriage, regardless of the date you were married.  You are considered married for a tax year if you are legally married at the end of the year.

To learn about the election under SCRA, see Election for Servicemembers and their spouses.

How to claim the election for tax year 2023

If you already filed a 2023 Form IT-201, Resident Income Tax Return, and you want to elect a different state of residence due to SCRA, file a 2023 Form IT-203-X, Amended Nonresident and Part-Year Resident Income Tax Return, and enter special condition code M4 in the item F box. 

If you already filed a 2023 Form IT-203, Nonresident and Part-Year Resident Income Tax Return, and you want to elect New York State as your state of residence due to SCRA, file a 2023 Form IT-201-X, Amended Resident Income Tax Return, and enter special condition code M4 in the item G box. 

Generally, the filing status reported on your New York State and federal returns must match. However, under SCRA, you and your spouse may elect different states of residence.  This may result in a change in filing status for New York State purposes only.

If your election under SCRA changes your filing status from Married Filing Jointly to another filing status, you and your spouse must file a paper 2023 amended return and clearly write SERVICEMEMBER RELIEF on the top of the first page of the amended return.

How to claim the election for tax years 2024 and after

If you elect New York as your state of residence under SCRA and you are required to file a return, file Form IT-201, Resident Income Tax Return, and enter the applicable special condition code(s) for you and your spouse in Item G. 

If you elect a state other than New York as your state of residence under SCRA, and you are required to file a return, file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, and enter the applicable special condition code(s) for you and your spouse in Item F. 

The taxability of your military pay is determined by your residency.

Resident

If you are a resident of New York State, your military pay is subject to New York State income tax to the same extent it is subject to federal income tax. However, the following types of military pay are not subject to New York State income tax:

• combat zone pay; and
• compensation or bonuses for active service while a prisoner of war or missing in action during the Vietnam conflict.

Tuition payments, subsistence allowances, and any other benefits paid to, or on account of, a veteran or beneficiary under the laws relating to veterans, are treated the same for New York State tax purposes as for federal tax purposes. If these amounts are excluded from gross income for federal income tax purposes, they are not subject to New York State income tax.

Part-year resident

If you moved into or out of New York State during the tax year, either before you entered the military or after you left the military, you may be considered a part-year resident for New York State income tax purposes. The military pay you earned while residing in the state is subject to New York income tax.

Nonresident

If you are a nonresident of New York State your military pay is not subject to New York State income tax. Your military pay may be exempt from New York State withholdings. For more information, see Income tax withholding.

Other income that you receive from New York State sources may be subject to tax. For example:

• income from a civilian job in New York State during your off-duty hours, 
• income or gain from property located in New York State, or
• income from a business, trade, or profession carried on in New York State.

If you have other income subject to tax, you may be required to make estimated tax payments. For more information, see Estimated tax.

If you determined you are a nonresident because you meet all the conditions for nonresident status (of either Group A or Group B), you must follow these special instructions when filing your return.

New York City and Yonkers

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

The taxability of your pay as a military spouse is determined by your residency.

Resident

If you are a resident of New York State, your income is subject to New York income tax to the extent it is subject to federal income tax (regardless of where the income is earned). 

If you are in another state solely to be with your servicemember spouse who is in that state in compliance with their military orders, and you:

• are employed in that state, you should determine if your employer will withhold New York state personal income tax from your wages. For more information, see Income tax withholding.
• operate a business in that state, you may have to pay estimated tax to New York State. For more information, see Estimated tax.

Nonresident

Your income earned in New York State is excluded from New York Source Income under the Servicemembers Civil Relief Act (SCRA) and will be exempt from any personal income tax if:

• you are a nonresident of New York State, and
• you are in New York State solely to be with your servicemember spouse who is in New York State in compliance with their military orders.

For purposes of SCRA exemption, income earned in New York State includes:

• wages, salaries, and other compensation for services performed by a military spouse in New York State as an employee; and
• any business income or loss (other than a capital gain or loss from the sale of real property located in New York State) a military spouse has from a sole proprietorship carried on in New York State or from a partnership, including an LLC treated as a partnership, where the partnership or the LLC carries on business in New York State, if the income or loss or any part of the income or loss is required to be included in the computation of net earnings from self-employment for purposes of the federal self-employment tax (SE tax).

This exemption will continue to apply if your servicemember spouse is subsequently assigned outside the United State or to another state, and you remain in New York State, provided your servicemember spouse's permanent duty station remains in New York State.

Your pay may be exempt from New York State withholdings. For more information, see Income tax withholding.

Note: This exemption does not relieve you of the obligation to file an income tax return or pay income tax to your home state if your home state has an income tax. You should check with your home state for its requirements.

Resident

As a resident of New York State, your income is subject to withholding of New York State income tax (and, if applicable, New York City or Yonkers income taxes). If the amount withheld from your pay is more than the total New York State, New York City, and Yonkers income tax you owe, you must file Form IT-201, Resident Income Tax Return, with the Tax Department to claim a refund.

Nonresident

As a nonresident of New York State, you may claim an exemption from New York income tax withholdings. If you are a:

• servicemember, your military pay is not subject to withholding of New York State income tax.
  • If you want to claim the exemption, complete New York State Tax Department Form IT-2104-MS, New York State Withholding Exemption Certificate for Military Service Personnel, or Department of Defense Form 2058-1, State Income Tax Exemption Test Certificate, and file it with your military finance officer. Do not send the form to New York State.

• military spouse, your income earned in New York State is not subject to withholding of New York State income tax.
  • If you want to claim the exemption, complete New York State Tax Department Form IT-2104-E, Certificate of Exemption from Withholding, and file it with your employer. Do not send the form to New York State.

If New York State tax was already withheld from your pay, you must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, to claim a refund of the amounts withheld.

You may be eligible to file for free. For more information, see free file your income tax return.

Provide additional documentation with your return in the following situations:

You meet all the conditions for nonresident status (of either Group A or Group B)

If your domicile was New York State when you entered the military and:

• you meet all three conditions in Group A for the tax year, you will be treated as a New York State nonresident for the full tax year.

You may claim a refund of any New York State income tax withheld from your military pay by filing Form IT-203 with the department. You must include an explanation that contains all of the following:

1. 1. statement that you did not have a permanent place of abode in New York State during the tax year;
   2. the location and a brief description of the permanent place of abode you maintained outside New York State, and the beginning and ending dates of your stay there; and
   3. the exact number of days you were in New York State during the tax year.

• you meet all three conditions in Group B, you will be treated as a nonresident for the entire 548-day period.

You must file Form IT-203 for the tax year in which the 548-day period began. For the part-year resident period, include any items of income, gain, loss, or deduction received or accrued up to the time of change of residence. For the nonresident period, include any items of income, gain, loss, or deduction derived from or connected with New York State sources. You may also be required to file Form IT-203 for the year you return to New York State.

You late filed your return or late paid any taxes because of your military service

File a paper return and clearly write LATE FILING DUE TO ACTIVE DUTY on the top of the first page of the return. Additionally, your late return(s) and payment(s) should include a statement that indicates you were on active duty at the time and include the exact dates of your duty. This information may allow the department to accept your late return(s) or payment(s) without imposing penalties.

If there is an excessive or unreasonable delay between the time you leave the service or are relieved from active duty, and the time you file your return(s) or pay your tax(es), you will be subject to penalties and interest charges.

New York State tax relief provisions are available to you, if you are a member of the armed forces or support personnel who:

• served or are currently serving in a combat zone or qualified hazardous duty area (hereafter: combat zone),
• are serving in a contingency operation deployed outside the United States, or
• qualified for hostile fire pay for providing services in direct support of a combat zone military operation in an area not designated as the combat zone.

For more information, see Combat zone, qualified hazardous duty area, and contingency operations.

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

For more information see IT-225-I, Instructions for Form IT-225 New York Modifications.

Military pension payments you receive as a retired military personnel or as their beneficiary are totally exempt from New York State, New York City, and Yonkers income taxes.

Benefits paid to, or on account of, a veteran or beneficiary under the laws relating to veterans, are treated the same for New York State tax purposes as for federal tax purposes. If these amounts are excluded from gross income for federal income tax purposes, they are not subject to New York State income tax.

If you are a reservist called to active duty or a regular military member (regardless of the location in which you are serving), you may qualify to defer the payment of back income taxes. To qualify, you must show that your ability to pay the back taxes has been materially impaired. You must have received a notice of tax due or be on an installment payment agreement with New York State, before applying for the deferral.

If you have received a billing or collection document and believe that you qualify for this deferral, please write Military Duty Deferral Request on the top of a copy of the document received, include an explanation concerning how your military service has created an inability to pay, and send the copy and explanation back to the department.

If you currently have an installment payment agreement or make automated payments with the department and believe that you qualify, please contact our Civil Enforcement Division at (518) 457-5434 and inform the representative about your situation.

If you are an active-duty member of the Army, Navy, Air Force, Marine Corps, or Coast Guard who has a New York State tax liability, and your service has materially affected your ability to pay the liability, you may be eligible for an interest rate benefit. The limitation caps the interest rate that can be charged to 6% per year for obligations or liabilities incurred before entry into active service.

The reduced rate applies only if the service materially affects your ability to pay and only applies to the interest charged during your period of active duty.

Reservists, including the National Guard, must be placed on active duty to qualify. National Guard personnel not serving in a federalized status (for example, on state active duty for disaster relief) are not eligible for this relief.

If you have received a billing or collection document and believe that you qualify for this benefit, please write Military Duty Interest Reduction Request on the top of a copy of the document received and send the document back along with a copy of your active-duty orders.