DC tax on outside income of military stationed in DC

[poolcleaner]

My client has been stationed in DC for the full year of 2023 in the military.  She is considered by the military to be a resident of Texas even though she was in DC all year.  She did several part time jobs during the year for which she was given W-2s with DC withholding.  I cannot decide whether she needs to file a D40 (resident) or a D40B (non-resident).  I talked to the DC Revenmue Service and they said to file the D40B requesting all the withholdings back and then if DC rejects it, to file again on the D40!  A military site said that she needs to pay DC tax on her part time income but spouses do not.  Help!!!

Another Former AllStar

[rbynaker]

Bumping 'cause I don't know but I saw Susan around here recently. 🙂

[sjrcpa]

Gee thanks Rick. 🙂

I've never had this particular situation, but my quick look says you file the D-40 and subtract the military wages.

[poolcleaner]

Crazy, but the customer help in DC says to use the D-40B and request all the withholding back.  If that is rejected, then you file the D-40.  There is no way to do any of the things they tell you to do because the forms do not have the necessary lines..  The worst is completing the Form D-40B and then ProSeries will not let you print anything!! Four hours of trying with client sitting with me and I finally went to the DC website, found the form, filled it in and printed with no issues!  It cannot be efiled.What a nightmare it has been.  Military sources say you have to pay the taxes on the extra income but if T/P has a spouse, it is very easy to excuse them from DC taxes so why not the actual person in the military?

[sjrcpa]

Good luck. I predict DC will reject the D40-B after a few months,