According to the Massachusetts website, " Under the MSRRA, a spouse of a service member may be exempt from Massachusetts personal income tax on income from services performed in MA by the spouse if all of the following are applicable:
- the service member must have declared "legal residence for purposes of withholding state income taxes from military pay" in a state other than Massachusetts;
- the service member is present in or near Massachusetts in compliance with military orders;
- the spouse is in Massachusetts solely to be with the service member
- the spouse is domiciled in the same state as the service member."
The Military Spouse Residency Relief Act has been amended starting tax year 2018. Under federal law, a military spouse is now allowed to choose the same residence for state taxation purposes as the servicemember regardless of the date the servicemember and spouse were married.
To claim tax-exempt from Massachusetts withholdings:
The qualifying servicemember's spouse (if qualified) may claim an exemption from Massachusetts withholding tax. The spouse must complete Form M-4 MS to claim exempt status. Additional information may be required to prove exempt status. The form must be validated annually.
To claim a refund of taxes withheld from your Massachusetts income, follow these steps in the program:
- State Section
- MA Nonresident Return
- Deductions - Enter income excludible under MGL Ch. 41, sec 111F and/or Military spouse's nonresident income -enter military spouse income not subject to MA tax.
Print and sign the return and write "MSRRA" across the top of Form 1-NR/PY,Massachusetts requires the Form 1 NR/PY return to be paper filed; no e-file returns are allowed. Include copies of the following with the return:
- Military Spouse ID Card
- Department of Defense Form 2058, State of Legal Residence Certificate – "legal residence for purposes of withholding state income taxes from military pay;"
- Leave and Earnings Statement of service member
- Service member's current military orders assigning such service member to a post of duty in or near Massachusetts.
Military Spouse income may be taxable on your state return where you file as a resident.