Active duty service members have always been able to keep one state as their state of legal residency (usually their Home of Record) for tax purposes even when they move frequently on military orders. A state of legal residence (SLR) is also considered their “domicile” or “resident” state.
This was not so for the nonmilitary spouse until the Military Spouse Residency Relief Act (MSRRA) was signed in 2009. Since then, a nonmilitary spouse of a service member may be able to keep the same resident state of the military spouse regardless of which state they live in.
How a nonmilitary spouse claims a resident state:
A nonmilitary spouse cannot just choose the service member’s state or “inherit” or “adopt” that state upon marriage.
At a minimum, the spouse must have lived in that service member’s resident state before “claiming” it as their own resident state for MSRRA qualifications. The spouse must also be able to prove residency by being registered to vote, maintaining a driver’s license, and any other residency requirements of that state.
Qualifying for the MSRRA:
When the military family no longer lives in that resident state, to qualify under the MSRRA, the following conditions must be met:
- The service member is stationed, in compliance with military orders, in a state that is not his resident state,
- The nonmilitary spouse is in that state solely to live with the service member, and
- Both the service member and spouse have the same resident state.
When the nonmilitary spouse meets the above qualifications, their wages from services performed in that new state will only be taxed in their resident state, not by the state they are currently living in. For information about how to claim this in your account, visit our Knowledgebase and click on Military Filing Military State Information and select your state.
IMPORTANT: when living in a non-resident state, the spouse needs to check the state laws to determine if they need to declare their non-residency for withholding purposes. This may be required by their employer on an annual basis.
MSRRA rules are no longer applicable if:
- The service member leaves the service
- The couple divorces
- The service member moves to a new location where the spouse could join him/her, but chooses not to. If deployment is to a location where the spouse is not allowed to follow, it does not affect their MSRRA eligibility.
- The spouse clearly establishes the new state as a state of residence. This includes an action like applying to vote in that state.
For information on Military filing for your state, enter your state name and 'Military' in the Knowledgebase search bar.