JOINT BASE CHARLESTON, S.C. –
With tax season in full swing, it is important to remember where you came from. The Military Spouses Residency Relief Act, signed into law Nov. 11, 2009, made significant changes in how dual-income couples with one spouse in the military must file their returns with regards to state income taxes.
The Act changed the basic rules of taxation with respect to military spouses who earn income in a state in which they are living with the servicemember in compliance with military orders when that state is not the spouse's domicile (legal residence). Under these conditions, the spouse generally will not have to pay income taxes to the current state where income is earned. The spouse, however, would be required to pay income tax to the domiciliary state (assuming that state taxes wages).
The most commonly asked question during legal assistance is what is a domiciliary state or legal residence. A legal residence is the place an individual considers "home," where he or she has been physically present and formed the intent to remain for the indefinite future and return when temporarily absent.
A spouse will neither lose nor acquire a residence for tax purposes by entering or leaving a tax jurisdiction while accompanying a service member who is moving as a result of military orders. This applies to income taxes and personal property taxes. In some case, this means couples no longer will need to hire accountants specifically to work out paying income taxes or property taxes in multiple states.
The spouse of a service member is exempt from income taxation by said state when he or she:
-Currently resides in a state different than the state of his or her domicile
-Resides in the state solely in order to live with the service member, and
-The service member is present in the state in compliance with military orders.
Also, under this Act, military spouses will not lose the right to vote or register to vote in a state as a result of a military move. They could decide to register to vote at their new location, or they could keep their voting registration in the old state, even if they don't plan to return.
Another benefit is that a spouse will not have to change a driver's license or auto registration when moving in and out of states.
The entire law can be viewed at
http://www.govtrack.us/congress/billtext.xpd?bill=s111-475.