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Income tax confusion

Three military officers recently received income tax bills from the state of California seeking back taxes for time spent there during past assignments.

But because they were legal residents of other states during those assignments, none could possibly owe a penny in back taxes to the Golden State.

Under the Servicemembers’ Civil Relief Act, service members may claim legal residence in any state in which they are assigned and may keep that state as their legal residence for as long as they are on active duty, even after they’re reassigned to other states.

service members fortunate enough to be based at some point to the handful of states that have no state income tax, such as Texas and Florida, typically keep those states as their legal residences when they move on.

California tax officials know this — or they should. And, in fact, when the three service members contacted California tax officials, their tax “bills” were quickly dropped.

California officials could not readily explain why these three officers received erroneous state tax bills. Perhaps it was just computer data error.

But how many service members receive such erroneous tax bills and mistakenly pay them without question?

Now that the holidays are past, tax season soon will arrive again, in the form of earnings statements from employers, banks and the like. Active-duty members need to remember the bottom line when filing:

If they owe any state taxes, it is only to the state they claim as their legal residence. Troops with questions about whether they owe state taxes should visit their installation legal assistance office right away.

The better solution is for state officials to be more careful about following the law regarding taxation of service members.