Does California Tax military pay?

Question

I heard that some states don't deduct a state tax on military pay. A friend actually proved it that on his stub said no tax was taken from him. He's from Connecticut. Does California tax military members?

Answer 1

Each military person has a "home of record", and state taxes are based on that. If you are from Dallas, TX on your home of record but are stationed in San Diego, you will not lose California state taxes out of your income.

Answer 2

For any month that they are in a combat zone for any part of the month, their pay is completely tax-free -- they pay no federal or state income tax and no social security or medicare tax either.  Current combat zones are Iraq and Afghanistan and a few more places.  Even a day in those zones makes that month's pay exempt from tax.

Any other pay they get (regular pay outside combat zones, bonuses, etc.) is taxable by the federal government and state and local governments too.  Each state does it differently.  What matters is what state you lived in when you went into the military.  California and Connecticut both do tax military pay so your friend must be exempt from being in a combat zone, not because he is from a tax-favorable state.

Answer 3

yes, unless you go to iraq