DRS: IP 99(32), Connecticut Income Tax Information for Armed Forces Personnel and Veterans

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

This Informational Publication has been superseded by IP 2000(22)

IP 99(32)

Connecticut Income Tax Information
for Armed Forces Personnel and Veterans


Purpose: This publication explains how the Connecticut income tax laws apply to members of the Armed Forces of the United States on active duty. It defines the requirements for Connecticut residency status for members of the Armed Forces and their families and the taxability of the types of income they receive. It also explains how to file a Connecticut income tax return and special conditions that apply to certain types of service.


Domicile and Permanent Place of Abode: To determine your resident status for Connecticut income tax purposes, you must consider where your domicile was before you entered the Armed Forces and where you maintained a permanent place of abode during the taxable year.

Your domicile (permanent legal residence) is the place you intend to have as your permanent home. It is the place you intend to return to whenever you are away. You can have only one domicile although you may have more than one place to live. For income tax purposes, your domicile is the state where your permanent home is located.

You can have only one domicile. Your domicile does not change until you move to a new location and definitely intend to make your permanent home there. If you move to a new location but intend to stay there only for a limited period of time (no matter how long), your domicile does not change. Armed Forces assignments do not generally affect your domicile.

A permanent place of abode is a residence (a building or structure where a person can live) that you permanently maintain, whether or not you own it, and generally includes a residence owned by or leased by your spouse. A place of abode is not permanent if you maintain it only for a temporary or limited period of time to accomplish a particular purpose. For example, a temporary duty assignment does not change your permanent place of abode.

Barracks, quarters on a ship, or any structure that contains only dormitory-type quarters and not facilities ordinarily found in a dwelling, such as facilities for cooking and bathing, generally do not qualify as a permanent place of abode.


Resident and Nonresident Defined: You are a resident and you should complete Form CT-1040EZ or Form CT-1040 if:

  • Connecticut was your domicile for the entire taxable year; or
  • You are domiciled elsewhere but maintained a permanent place of abode in Connecticut, spent a total of more than 183 days in Connecticut during the taxable year and you are not a part-year resident.

If you are in the Armed Forces and stationed in Connecticut, but your domicile is elsewhere, you do not become a resident of Connecticut even though you spend more than 183 days in Connecticut during the taxable year. Armed Forces personnel who are domiciled in Connecticut but are stationed elsewhere are subject to Connecticut income tax. If you enlisted in the service as a Connecticut resident and have not established a new domicile (permanent legal residence) elsewhere, you are required to file a resident income tax return unless you meet all of the following conditions for the entire taxable year:

  1. You did not maintain a permanent place of abode in Connecticut;
  2. You maintained a permanent place of abode outside Connecticut; and
  3. You spent 30 days or less in Connecticut.

If you meet all three conditions, you are a nonresident of Connecticut for the taxable year. You do not have to file a resident income tax return. However, if you have any income from Connecticut sources, you may have to file a nonresident income tax return. Review the following examples to determine if you must file Form CT-1040NR/PY, Connecticut Nonresident or Part-Year Resident Income Tax Return.

Example: Steve was a resident of Connecticut when he joined the Army and has not established a new domicile. He does not maintain a permanent place of abode in Connecticut. He visited his parent's home in Connecticut for only two weeks during the taxable year. He lives in dormitory-type housing at his permanent duty assignment in Texas.

Steve did not meet all three conditions to be taxed as a nonresident because dormitory-type housing does not qualify as a permanent place of abode. Therefore, Steve is a resident of Connecticut for income tax purposes.

Example: Moira was a Connecticut resident when she entered the Navy and has not established a new domicile. Her permanent duty assignment is San Diego, California. For all of the taxable year she rented an apartment in San Diego. She did not visit Connecticut during the taxable year and she does not have a permanent place of abode in Connecticut.

Renting or owning an apartment or house for the entire taxable year at a permanent duty assignment qualifies as maintaining a permanent place of abode outside Connecticut. Additionally, Moira did not maintain a permanent place of abode in Connecticut or spend more than 30 days in Connecticut during the taxable year. Therefore, Moira is still domiciled in Connecticut, but she meets all three conditions for being a nonresident, so she is considered a nonresident for the taxable year.

Example: Assume the same facts as in Example 2. In the following year, Moira is temporarily assigned to a naval base in Florida. She gives up her apartment in San Diego and rents a house near the base in Florida.

A place of abode is not permanent if it is maintained only during a limited or temporary period or for a particular purpose. Because Moira did not meet all three conditions to be taxed as a nonresident, she is a Connecticut resident in that taxable year.


Nonresident Members of the Armed Forces: If your permanent home (domicile) was outside Connecticut when you entered the Armed Forces, you do not become a Connecticut resident because you are stationed and live in Connecticut. You are a nonresident and your Armed Forces pay is not subject to Connecticut income tax.

However, other income that you receive from Connecticut sources while you are a nonresident may be subject to tax. For example, if you have a civilian job in Connecticut during your off-duty hours, the income you earn is subject to Connecticut income tax. Income or gain received by a nonresident from property located in Connecticut or from a business, trade or profession carried on in this state is also subject to tax.

Spouses of Armed Forces personnel who are stationed in Connecticut may be considered residents of this state even if their domicile is elsewhere. If your spouse has a permanent place of abode in Connecticut and spends more than 183 days in the state in the taxable year, he or she is a resident for Connecticut income tax purposes.

Example: Bob and Sue are domiciled in Florida. Bob enlisted in the Navy in Florida and was stationed in Groton, Connecticut with his wife. They lived in Connecticut for 8 months during the taxable year. Bob earned $38,000 in Armed Forces pay.

A. They had no other income. Armed Forces personnel are residents of the state in which they resided when they enlisted. Because Bob resided and enlisted in Florida, he is not considered a resident of Connecticut and does not have to file a Connecticut return.

B. Bob had a part-time civilian job in Connecticut from which he earned $10,000. Bobís civilian income is Connecticut source income and is subject to Connecticut income tax. He must file Form CT-1040NR/PY, Connecticut Nonresident or Part-Year Resident Return.

C. Sue had $29,000 in wage income and $1,000 in interest income for the taxable year. Because Sue lived in Connecticut for more than 183 days during the taxable year, she is a resident and must file Form CT-1040 or Form CT-1040EZ, and report all her income whether or not it is from a Connecticut source.

Example: John is domiciled in Connecticut but stationed in Texas. John meets all three conditions to be a nonresident. He sold property in Connecticut during the taxable year on which he recognized a capital gain. He must file Form CT-1040NR/PY, because income from the sale of property in the state is Connecticut source income and is subject to Connecticut tax.


Part-Year Residents: If you change your domicile to or from Connecticut during the taxable year, you are a part-year resident. A part-year resident is subject to tax on all income earned during the residency period of the year and on income from Connecticut sources during the nonresidency period.


Resident Members of the Armed Forces: If you are a Connecticut resident in the Armed Forces and you meet either of the following conditions for the taxable year, you must file a resident return:

  • You had Connecticut income tax withheld or made estimated Connecticut income tax payments; or
  • Your federal gross income (plus any income that is federally exempt, but subject to Connecticut income tax) exceeds:

$12,000 for a Single person or a Married person filing separately
$19,000 for a Head of household
$24,000 for Married persons filing jointly.


Taxability of Armed Forces Pay for Residents: If you are a Connecticut resident, your Armed Forces pay or your Armed Forces pension is subject to Connecticut income tax to the same extent that it is taxable for federal income tax purposes.

Disability pensions and any other benefits granted for the relief of injuries or disabled veterans, as well as 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 Connecticut income tax purposes as for federal income tax purposes. If these amounts are excludable from gross income for federal income tax purposes, they are not subject to Connecticut income tax.


Withholding and Payment of Estimated Income Tax: If you are a Connecticut resident, your Armed Forces pay is subject to Connecticut income tax withholding. You should complete Form CT-W4, Employer's Withholding and Exemption Certificate, and provide it to your Armed Forces finance officer so that the correct amount of Connecticut income tax is withheld from your pay. However, if you are a nonresident during the taxable year, you may request that no Connecticut income tax is withheld from your pay by checking the exemption box on Form CT-W4 and filing it with your Armed Forces finance officer. Do not send Form CT-W4 to the Department of Revenue Services. If you expect to owe more than $500 in Connecticut income tax after subtracting Connecticut income tax withheld during the taxable year, you should make estimated Connecticut income tax payments or increase your Connecticut income tax withholding. See Informational Publication 00(1), Is My Withholding Correct? or Informational Publication 99(35), Estimated Connecticut Income Taxes. Use Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon, to make estimated Connecticut income tax payments.


Requesting a Refund: If you are domiciled in Connecticut but meet all three conditions to be a nonresident, you must file Form CT-1040NR/PY to claim a refund of any Connecticut income tax that was withheld in error. You must attach an explanation that contains the following:

  1. A statement that you did not have a permanent place of abode in Connecticut during the taxable year; and
  2. The location and a description of the permanent place of abode you maintained outside Connecticut and the beginning and ending dates of your stay there; and
  3. The exact number of days you were in Connecticut during the taxable year.

If you are a resident you must file Form CT-1040 or Form CT-1040EZ if the amount withheld from your pay or the amount paid in estimated tax is more than the Connecticut income tax you owe. (Nonresidents file Form CT-1040NR/PY to claim a refund under these circumstances.)


When to File Your Return: As a member of the Armed Forces you must file your Connecticut return at the same time and in the same manner as any other taxpayer. File your return as soon as you can after the end of the taxable year, but no later than April 15, of the following year. If you file for a fiscal year other than the calendar year, your return is due by the 15th day of the fourth month following the end of your fiscal year.


Extension of Time to File Returns: If you cannot meet the April 15 deadline and need to extend the time for filing your return, you must use Form CT-1040 EXT, Application for Extension of Time to File. The time to file your return will be extended six months. File Form CT-1040 EXT on or before the due date for filing your return. Form CT-1040 EXT must be accompanied by full payment of tax due. In general, penalty and interest apply to any portion of the tax that is not paid on or before the original due date of the return. A penalty of 10% (.10) applies to any portion of the tax that is not paid on or before the original due date of the return. If a request for an extension of time to file an income tax return has been granted, no late payment penalty will be imposed if:

  • At least 90% of the income tax shown to be due on the return is paid on or before the original due date of the return; and
  • The balance is remitted with the return on or before the extended due date of the return.

Interest of 1% (.01) per month, or fraction of a month, also applies to any tax that is not paid by the original due date of the return.


U.S. Citizens Living Abroad: If you are a U.S. citizen or resident living outside the United States and Puerto Rico, or in the Armed Forces of the United States serving outside the United States and Puerto Rico, and are unable to file a timely Connecticut income tax return, you must file Form CT-1040 EXT and pay the amount of tax you owe on or before the original due date of the return. Include a statement with Form CT-1040 EXT that you are a U.S. citizen or resident living outside the United States and Puerto Rico, or in the Armed Forces of the United States serving outside the United States and Puerto Rico, and that you qualify for a federal automatic two-month extension of time to file. If your application is approved, the due date will be extended for six months (October 15 for calendar year filers). If you are still unable to file your return and you were granted an additional extension of time to file for federal purposes, you may also file your Connecticut return using the federal extension due date. You must attach a copy of the federal Form 2350 approval notice to the front of your Connecticut income tax return.


Combat Zone: The Connecticut income tax return of any individual in the U.S. Armed Forces serving in a combat zone or injured and hospitalized while serving in a combat zone is due 180 days after returning. There will be no penalty or interest charged.

Combat Zone is an area designated by the President of the United States as a combat zone by executive order. A combat zone also includes an area designated by the federal government as a qualified hazardous duty area.

Members of the U.S. Armed Forces serving in the military operations in the Kosovo region are eligible for the 180 day extension allowed to individuals serving in a combat zone. Spouses of military personnel and civilians supporting the military in the Kosovo region who are away from their permanent duty stations but are not within the designated combat zone are also eligible for the extension. Individuals requesting an extension under the Kosovo provision should print the words "Operation Allied Force" at the top of the tax return.


Death of Armed Forces Personnel: For any individual who dies while on active duty in a combat zone or as a result of injuries received in a combat zone, no income tax or return is due for the year of death. A refund of tax paid will be provided to the legal representative of the estate or to the surviving spouse. If any tax was assessed but not paid, the assessments will be canceled.


Related Forms and Publications: See the current edition of the following forms and publications for further information:

IP 99(35), Estimated Connecticut Income Taxes
IP 00(1), Is My Connecticut Withholding Correct?
Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon for Individuals
Form CT-1040, Connecticut Resident Income Tax Return and Instructions
Form CT-1040EZ, Connecticut Resident EZ Income Tax Return and Instructions
Form CT-1040NR/PY, Connecticut Nonresident or Part-Year Resident Income Tax Forms and Instructions


Effect of This Document: An Informational Publication (IP) is a document that addresses frequently asked questions about a current Department position, policy or practice, usually in a less technical format.


Effect on Other Documents: Informational Publication 99(32), supersedes Informational Publication 92(2.5) which may no longer be relied upon on or after this date.


FOR FURTHER INFORMATION: Please call the Department of Revenue Services during business hours, Monday through Friday:

  • 1-800-382-9463 (toll-free within Connecticut), or
  • 860-297-5962 (from anywhere).
  • TTY, TDD, and Text Telephone users only may transmit inquiries 24 hours a day by calling 860-297-4911


FORMS AND PUBLICATIONS: Forms and publications are available all day, seven days a week:

  • Internet: preview and download forms and publications from the DRS Web site: http://www.ct.gov/drs
  • Telephone: Call 860-297-4753 (from anywhere), or 1-800-382-9463 (toll-free within Connecticut) and select Option 2 from a touch-tone phone

IP 99(32)
Income Tax
Military Personnel
Issued: 11/23/99
Replaces: IP 92(2.5) Issued 12/04/98