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News > Military Spouses Residency Relief Act exempts state income tax
Military Spouses Residency Relief Act exempts state income tax

Posted 3/16/2011   Updated 3/16/2011 Email story   Print story


by Capt. Tania Bryant
375th Air Mobility Wing Legal Office

3/16/2011 - SCOTT AIR FORCE BASE, Ill.  -- Military Spouses Residency Relief Act exempts state income taxIn November 2009, President Barack Obama signed the Military Spouses Residency Relief Act into law. The MSSRA amends the Servicemember's Civil Relief Act to provide additional protections to spouses of servicemembers relating to residency, taxes, and voting rights.

SCRA applies to all 50 states of the United States and to all territories (i.e., Puerto Rico, U.S. Virgin Islands, Guam and the Marianas Islands) subject to U.S. jurisdiction.

The Military Spouses Residency Relief Act and Taxation: Under the new law, a military spouse who is present with a servicemember in a particular state under military orders does not have to pay state income tax on wages earned in that state as long as that state is not the spouse's domicile (permanent home). However, the spouse would have to pay taxes to the state of domicile, if the laws of that state required such payments. Some states, of course, do not have state income taxes.

The MSRRA does not allow a spouse to pick or chose a domicile in just any state.

Domicile is established, not arbitrarily chosen. The spouse must have actually been present in the state, established it as his or her domicile, and maintained it by forming and maintaining the necessary contacts, such as registering to vote, owning property, registering vehicles, holding professional licenses, declaring a homestead, or indicating a state of probate in a last will and testament.

The law is complicated, and because its effect will depend on the interpretations of each state, servicemembers and their spouses are encouraged to seek free, confidential advice from the Scott Air Force Base legal assistance office.

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