- Welcome to Curt's Chalk Talk, the Executive Acronym Series. I'm Curt Sheldon with C.L. Sheldon & Company and today we're going to talk about SALT.
Now I suspect that due to the TCJA, which stands for the Tax Cuts and Jobs Act most of you are aware that SALT stands for State And Local Taxes. And here's where it becomes an issue for you as you transition from military to your executive position. Most of us while we're on the military, in the military, maintain a state that does not have a state income tax as our residence. This is allowed under the SCRA, or Servicemembers Civil Relief Act.
Now what most of us may not realize is that rule only applies to your military compensation. So if you take a job while you're on terminal leave, even if you maintain, let's say, your Texas residency, the income that you earn in, say, Virginia, will be non-resident income subject to Virginia state and local taxes. So even though you're still a Texas resident since you're earning the money in Virginia, Virginia has the right to tax that. You want to make sure you talk to your employer about how to do your withholding.
And oh, by the way, don't forget to do that when it comes to your retirement pay to make sure you get this right.
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