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. Please refer to TIR 19-15 Taxation of the Income of Military Servicemembers and their Spouses.
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, take the following path in your account:
- 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.