Per the Federal Military Spouses Residency Relief Act (MSRRA) “for tax years beginning on or after 2009 for spouses who are residents of the same state as the military servicemember, the income earned by the spouse while accompanying the servicemember to Nebraska is only taxable in the spouse's state of legal residence.”
According to the Nebraska Department of Revenue, “effective for tax years beginning in 2009, the income earned for services performed in Nebraska by the spouse, who is a legal resident of a state other than Nebraska, is exempt from Nebraska income tax if:
- The servicemember is present in Nebraska solely in compliance with military orders;
- The spouse is in Nebraska solely to be with the servicemember; and
- The spouse is a legal resident of the same state as the servicemember.
All three conditions must be met to qualify for exemption as a qualified spouse.”
To claim tax-exempt from Nebraska withholdings:
Qualified spouses must complete and file the Nebraska Employee Certificate for Allocation of Withholding Tax, Form 9N, with their employers. On Form 9N, check the box certifying that you are a qualified spouse. If your employer has done any withholding for the current year, an adjustment can be made on a future paycheck to refund this prior withholding. This form needs to be completed annually.
To claim a refund of taxes withheld from your Nebraska income, follow these steps in the program:
- State Section
- Nebraska Nonresident Return
- Income Subject to Tax
- Amounts Derived from Nebraska Sources
- Income of Servicemembers Spouse - Enter military spouse's income not taxable to Nebraska
Military Spouse income may be taxable on your state return where you file as a resident.