According to the Montana Department of Revenue, "the Servicemembers Civil Relief Act was amended so that a taxpayer moving to a state to be with their spouse who is a military servicemember may choose to use the tax residence of the military spouse.
Previously, when a taxpayer was not a resident of the state where his or her spouse was a resident for tax purposes, the Act did not provide protection against gaining tax residency in the state where the taxpayer moved to in order to be with their spouse.
A servicemember’s spouse can now elect to be protected by the Act by choosing the tax residency of the servicemember when filing their state income tax return.
The Act also exempts spouses who are not residents of Montana for tax purposes from paying income tax on the wages they earn in the state. The protection does not apply to a spouse that is already a resident of Montana or who elects to be a resident of Montana."
To claim tax-exempt from Montana withholdings:
Form MW-4, Military Spouse Exemption Form, "is required because an employer who should withhold tax but does not, can be held personally liable for the tax. The withholding exemption certificate protects the employer from liability."
To claim a refund of taxes withheld from your Montana income, follow these steps in the program:
- State Section
- Montana Nonresident Return
- Basic Information
- Select your Filing Status - Select Married filing a Joint Return
- Select Nonresident Part Year Income
- Wages that are exempt from Montana - Military salary of residents on active duty or exempt income of nonresident military servicepersons and their spouses. Enter amount in Taxpayer box only.
Military Spouse income may be taxable on your state return where you file as a resident.