Question

Walker is an active-duty member of the U.S. Army. He has been stationed at the Fort Jackson Army base in South Carolina since September 2018. Texas was his state of legal residence at the time he entered the military. He is serving in South Carolina in compliance with military orders. Walker rented an apartment outside of the base on December 1, 2018, where he continues to live. He was physically present in South Carolina for 11 months of the tax year. What is Walker's South Carolina residency status?

Part-year resident.

Nonresident.

Resident, because he meets South Carolina's domicile residency test.

Resident, because he meets South Carolina's statutory residency test.

Answer 1

Non- Resident

Justification:

As per the South Carolina Income Tax rules,

If you are not a South Carolina resident but are stationed in this state by military orders, your military income is not subject to South Carolina tax. If you have other earned income subject to South Carolina tax, file SC1040 with Schedule NR. Your spouse may be exempt from South Carolina Income Tax on income from services performed in South Carolina under the Federal Military Spouses Residency Relief Act.

For paying the income tax, you need to determine the residential staus of the individual. Under most circumstances, a person must live in South Carolina for 12 consecutive months in order to establish residency. But, mere stay of continuous 12 months is not enough for a person to become resident in SC.

The various documents establish intent to become a SC resident are:

1. Statement of full time employment;

2. Designating South Carolina as state of legal residence on military record;

3. Possession of a valid South Carolina driver’s license, or if a non driver, a South Carolina identification card. Failure to obtain this within 90 days of the establishment of the intent to become a South Carolina resident will delay the beginning date of residency eligibility;

4. Possession of a valid South Carolina vehicle registration card. Failure to obtain this within 45 days of the establishment of the intent to become a South Carolina resident will delay the beginning date of residency eligibility; 5. Maintenance of domicile in South Carolina;

6. Paying South Carolina income taxes as a resident during the past tax year, including income earned outside of South Carolina from the date South Carolina domicile was claimed;

7. Ownership of principal residence in South Carolina; or

8. Licensing for professional practice (if applicable) in South Carolina

In the given situation, the person belong to Texas and was part of the militiary group. In that scenario, the said person need not pay any tax for his income in South Carolina. Also, since he has not completed 12 months continuous stay in SC (it is mentioned that he has stayed only for 11 months), he becomes a non-resident.