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:
- 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. 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.