Armed Forces Information
Notice: The information included on this website is to be used only as a guide in the preparation of a North Carolina individual income tax return. It is not intended to cover all provisions of the law or every taxpayer's specific circumstances.
Active Military
If you are serving in the United States Armed Forces and your domicile (legal residence) is North Carolina, you must pay North Carolina income tax and North Carolina income tax should be withheld from your military pay, regardless of where you are stationed. Domicile or legal residence is an individual's permanent home. Your legal residence does not change even though you may be absent for one or more years unless you intend to change your state of residence and you take voluntary and positive actions to do so. Actions that demonstrate your intent to establish a new state of residence include: physical presence in a new location, registration of automobiles, location of bank accounts, and filing and paying local property and income tax in the new location. Without such actions, residency is not changed. A statement that a servicemember intends to carry out these actions at a later date is not sufficient.
Under the Servicemembers Civil Relief Act, a member of the Armed Services who is a legal resident of another state stationed in North Carolina by virtue of military orders is not subject to North Carolina income tax on service pay but other income from employment, a business, or tangible property in North Carolina is subject to North Carolina income tax.