MSRAA provides that spouses of military personnel who relocated to Arkansas under the servicemembers military orders for military duty due can keep their former residency for tax purposes throughout the marriage. In order to be eligible for exemption under the MSRRA the following three requirements must be met by the spouse:
- The servicemember spouse is in the state of Arkansas in compliance with military orders.
- Relocated to Arkansas solely to live with the servicemember spouse.
- The state of domicile or residency claimed by the servicemember and spouse is the same.
To claim tax-exempt from Arkansas withholdings:
If requirements are met for the relief, the military spouse should file Form AR-MS to exempt income from Arkansas withholding. This allows for refunds of any taxes withheld on the exempt income. File Form AR1000NR and write “Military Spouse” on top of the front page of the return. Attach Certificate AR-MS and any additional documentation (LES or other pertinent information) to help in the processing of your return. Do not include your income on the AR1000NR if you qualify for the exemption.
For future tax purposes, the nonmilitary spouse must submit a new payroll withholding Form ARW-4MS to his/her employer each year to exempt future income from Arkansas tax withholding. employer reviews it.
To claim a refund of taxes withheld from your Arkansas income, follow these steps in the program.
- State Section
- Nonresident Arkansas Return
- Subtractions from Income
- Military Spouse Relief Act, Form AR-MS
- Complete the information requested, including selecting Yes to the first question
- Continue to Save
Military spouse income may be taxable on your state return where you file as a resident.