This Informational Publication has been modified and superseded by IP 99(32) Purpose: This publication explains how the Connecticut income tax laws apply to members of the armed forces on active duty. It defines the requirements for Connecticut residency status for members of the military 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.
This Informational Publication has been modified and superseded by IP 99(32)
Purpose: This publication explains how the Connecticut income tax laws apply to members of the armed forces on active duty. It defines the requirements for Connecticut residency status for members of the military 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 military and where you maintained a permanent place of abode during the taxable year.
Your domicile is the place that you intend to have as your permanent home. It is the place you intend to return to whenever you are away. 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. Military 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 usually 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. You must also complete Form CT-1040EZ or Form CT-1040 if you are domiciled elsewhere but maintained a permanent place of abode in Connecticut and 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. If your domicile was Connecticut when you entered the military, your domicile does not change unless you have voluntarily given up your Connecticut domicile, established a new domicile in another state, and taken necessary actions to change your legal home of record with the Armed Forces.
You are a resident and must file a resident return and pay any tax due unless you meet all of the following conditions for the entire taxable year:
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 1: 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 2: Moira was a Connecticut resident when she entered the Navy and has not changed her resident status with the military. 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, although Moira is still domiciled in Connecticut, she meets all three conditions for being a nonresident, so she is considered a nonresident for the taxable year.
Example 3: Assume the same facts as in Example 2. In the next 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 domicile was not in Connecticut when you entered the military and you were later assigned to active duty in Connecticut, you do not become a Connecticut resident just because you maintain a permanent place of abode in Connecticut. You are a nonresident and your military 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 from it 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.
If you are stationed in Connecticut, your spouse may be considered a resident of Connecticut even if he or she is domiciled in another state. 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 4: 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 military pay.
Example 5: John is domiciled in Connecticut but stationed in Texas. John meets all three conditions to be a Connecticut 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 military and you meet either of the following conditions for the taxable year, you must file a resident return:
Taxability of Military Pay for Residents: If you are a Connecticut resident, your military pay or your military 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 military pay is subject to withholding of Connecticut income tax. You should complete Form CT-W4, Employer's Withholding and Exemption Certificate, and provide it to your military finance officer so that the correct amount of Connecticut income tax will be 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 military 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 income tax payments or increase your Connecticut income tax withholding. See IP 92(9.6), Is My Connecticut Withholding Correct? or IP 92(5.8), Estimated Connecticut Income Taxes. Use Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon, to make estimated 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:
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 military 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) will apply to any portion of the tax that is not paid on or before the original due date of the return. However, taxpayers who pay 90% (.90) or more of their total income tax due with their extension request by the original due date of the return and pay the remaining balance by the extended due date will avoid penalty for failure to pay the full amount due by the original due date. Interest of 1% (.01) per month or fraction of a month will also apply to any tax that is not paid by the original due date of the return.
US Citizens Living Abroad: If you are a US 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 with Form CT-1040 EXT a statement that you are a US 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 US 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.
A Combat Zone is an area designated as a combat zone by executive order of the President of the United States. A combat zone also includes an area designated by the federal government as a qualified hazardous duty area. Therefore, members of the US Armed Forces serving in the peacekeeping efforts in Bosnia and Herzegovina, Croatia or Macedonia, are also eligible for the 180-day extension allowed to individuals serving in a combat zone. Individuals serving in Bosnia, Herzegovina, Croatia or Macedonia should print "Bosnia-Operation Joint Endeavor" at the top of their income tax return.
Death of Military Personnel: When a member of the Armed Forces dies while on active duty in a combat zone or as a result of injuries received while serving in a combat zone, all income taxes are waived for the taxable year of the death and for any prior taxable year ending on or after the first day the deceased served in that combat zone. No income tax returns have to be filed for the deceased or the estate for these years. If the deceased paid any tax while serving in the combat zone, the full amount of the tax paid will be refunded to the estate or surviving spouse provided a return is filed to claim the refund. 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 92(5.8), Estimated Connecticut Income Taxes
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, question-and-answer format.
Effect on Other Documents: IP 92(2.5), supersedes IP 92(2.4) which may no longer be relied upon on or after this date.
For Further Information: If you have questions about Connecticut taxes, please call the Department of Revenue Services during business hours, Monday through Friday:
Forms and Publications: You may obtain forms and publications at any hour, seven days a week:
Replaces: IP 92(2.4) Issued 1/8/98