Important Tax Information From DoD to Married Service Members and Spouses

In November 2009, the Military Spouses Residency Relief Act (MSRRA) became law.  This new law changes some basic rules of taxation that could affect you and your spouse.  Now, a military spouse who is present with a Service member (SM) in a particular State under military orders does not have to pay State income tax on wages earned in that State as long as that State is NOT the spouse's domicile (permanent home).  However, the spouse would have to pay taxes to the State of domicile, if the laws of that State required such payments.  Some States, of course, don't have State income taxes. 

The MSRRA does not allow a spouse to pick or chose a domicile in just any State.  Domicile is established, not arbitrarily chosen.  The spouse must have actually been present in the State, established it as his or her domicile, and maintained it by forming and maintaining the necessary contacts, such as registering to vote, owning property, registering vehicles, holding professional licenses, declaring a homestead, or indicating a State of probate in a last will and testament.  Similarly, the MSRRA does not allow a spouse to "inherit" or assume the SM's domicile upon marriage without the necessary contacts with the State. 

DON'T WAIT TO GET HELP!  The law is complicated, and because its effect will depend on the interpretations of each State, SMs and their spouses are encouraged to seek free, confidential advice from a military legal assistance office.  Legal assistance offices can be found at:  http://www.uscg.mil/legal/la/Legal_Assistance_Home.asp