According to the Idaho State Tax Commission, "As a service member's spouse, you may qualify for the federal Military Spouses Residency Relief Act, which was passed in November 2009. The Act exempts you from paying income tax if both of these are true:
- You're married to a service member who's serving in Idaho and has registered in the military with another state as a home of record; and
- You've moved to Idaho with the service member and you have the same domicile (permanent residence) as the service member's home of record."
To claim tax-exempt from Idaho withholdings:
If you qualify for the exemption, you can fill out Form ID-MS1, Employee's Idaho Military Spouse Withholding Exemption Certificate, and give it to your employer (your employer will keep a copy and send a copy to the Tax Commission). A new form is required each year.
To claim a refund of income taxes withheld from your Idaho income, follow these steps in the program:
- State Section
- Nonresident Idaho return
- Basic Information
- You must complete the information for your state of residency and your residency status. The Military member should select 'Military Nonresident' and the non-military spouse should select "Nonresident."
- Click Continue
- Deductions from Income
- Other Subtractions, enter the military spouse's pay for the federal subtraction and the state subtraction. Include description for the subtraction 'Military Spouse Residency Relief Act'.
- Click Continue through the Idaho return.
Military Spouse income may be taxable on your state return where you file as a resident.