Income Tax Withheld From Military Pay
If your home of record (and domicile) was New Jersey when you entered the military, you are considered a New Jersey resident, and New Jersey Income Tax will be withheld from your military pay. If you have changed your home of record (and domicile) from New Jersey to another state, or you satisfy the three conditions for nonresident status
, your military pay is not subject to New Jersey Income Tax.
If you meet the three conditions for nonresident status, file Form DD-2058-1, State Income Tax Exemption Test Certificate, with your payroll or finance officer to stop New Jersey Income Tax from being withheld from your military pay. Form DD-2058-1 is a U.S. government form that is used as a basis for not withholding New Jersey Income Tax from military pay. Do not file this certificate with the New Jersey Division of Taxation.
Native American servicemen and women use Form DD-2058-2 to claim exemption from state income tax withholding on their service pay. This form requires the individual to provide the name of the tribe to which they belong as well as the name of the reservation or location in Indian Country claimed as the individual's primary residence.
If New Jersey Income Tax was withheld from your military pay in error, you must file a nonresident return (Form NJ-1040NR)
to get a refund of the tax withheld. The income section of the New Jersey nonresident return has two columns: Column A, income from everywhere, and Column B, income from New Jersey sources. If you had no income from New Jersey sources other than your military pay, complete your nonresident return as follows:
- Enter in Column A the amount of your income from everywhere (excluding your military pay).
- Enter zeros on the wages line and gross income line in Column B for the amount of income from New Jersey sources.
- Enter the amount of New Jersey Income Tax withheld on the appropriate line and complete the "overpayment" and "refund" lines.
- Enclose a signed statement that lists the three conditions you satisfied for nonresident status and states how you met each of these conditions.
For more information on military personnel, see Tax Topic Bulletin GIT-7, Military Personnel For more information on filing status and New Jersey Income Tax, see Tax Topic Bulletin GIT-4, Filing Status