Many Soldiers qualify for a full refund of the taxes their state collected from them. Mobilized Reservists, National Guard, and Active Duty all have essentially the same benefits under the law.

The starting point for making the determination of what you are entitled to begins with the W-2 and what state is listed there. Sometimes this is the home of record but it may not necessarily be so.

The Servicemembersí Civil Relief Act (SCRA) allows active duty service members to claim their permanent residency state despite current limited ties to that state. This exempts those stationed in the National Capital Region from filing with the state they presently live in because of the current military assignment.

In many cases, it is to the servicememberís advantage to avoid taxation in the state he or she may temporarily live because of a military assignment. Be advised that the District of Columbia has one of the highest tax rates in the country. Maryland has not only a state income tax, but also a local tax, which varies from county to county.

Those servicemembers serving Walter Reed Army Medical Center and itsí surrounding units, who have claimed a state different from D.C., Maryland or Virginia as their state of residence, need not file with D.C., Maryland or Virginia because of the protections afforded by the SCRA.

The SCRA protections shield only military pay from taxation by the local state. Service members who have a second job in the civilian sector and non-military spouses with income are still subject to the taxation of the local state.

For example, Sgt. Maj. Carter entered the military in Pennsylvania and is now stationed at WRAMC. She owns property in Pennsylvania and is registered to vote there. She and her spouse live in Maryland and he works in Washington, D.C. as a corporate secretary. She listed Pennsylvania on her W-2 and has taxes withheld by that state. Where should they file for state income taxes? Sgt. Maj. Carter must file for Pennsylvania taxes, for which she will be due a refund in full but her husband must file in Maryland based on his civilian income. Some states exempt military members from paying taxes. If Sgt. Maj. Carter was from one of those states she would not have to file a return for that state.

What state you claim ultimately has a huge impact on your tax liability. There are details and intricacies in getting the proper state refund, especially from those states that offer a full rebate. Please visit the tax center in Delano Hall (Bldg. 11), Room 1-69, or make an appointment at (202) 356-1012 ext. 41213 for answers to these and other tax questions.