Residency Rules for Military Spouses - Tax Professionals Member Article By KLSM CPA Firm PLLC
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Residency Rules for Military Spouses

Residency Rules for Military Spouses

Military spouse residency is common among military personnel. The tax law created the residency relief act to assist military spouses. You may be wondering what it is for and what it does? Or if it truly exists and how to get involved. This article provides the answers to your questions.


The difference between ''residence'' and ''domicile.''

Before enjoying or understanding these rules, military spouses need to know the definition and legal terms used to secure such benefits. A domicile is a word used to refer to the home. Under tax laws, a person can only have one domicile at a time. A domicile is where you keep your property, register to vote, insure your vehicle, keep your driver's license, or do other transactions that concern you. You can change a domicile if these activities are relocated to a new location.

A residency is a place you live or the address currently on your work papers. Where you live can change with time, and the new location becomes the residency. For instance, military couples can be domiciled in New York due to legal paperwork but live in Florida.

 Another term is home or records. The Department of Defense defines this term as the location where the military personnel lived before joining the service. It is mainly used with military entitlement like final permanence change of station (PCS) allowances. After authentication, you can only change a recorded home if an error is found on the original paperwork. 


What is the Military Spouses Residency Relief Act?

The Military Spouses Residency Relief Act (MSRRA) was enacted in 2009 to privilege military spouses to file taxes with their domicile location. The law enables military spouses to file taxes using a single state. For example, an army spouse with California as their domicile but lives in Brooklyn is subject to California tax laws. The law was set to simplify the tax process for the spouse. 

However, the law does not include all military spouses. Those in different domiciles from their service member are not covered only in exceptions. These families file their taxes using multiple states.

MSRRA Eligibility Factors

MilitaryOneSource clarified that a military spouse must meet specific requirements covered by the MSRRA.

  • The service member is on duty in a foreign state.

  • The service member lives with their spouse in the state.

  • The residence state is the same for the spouses.

If the military deploys the service member without the spouse, the spouse is under MSRRA. The case is considered a travel or temporary duty deployment.


Limitations of the Military Spouse Residency Relief Act

The act is limited to specific requirements. The spouse or service member cannot personally choose a residency state. The couples must make decisions and conclusions together before moving to a different resident state. The Military OneSource shines more light on this by saying you can only do it through contacts such as property, voting, driver's license, registered vehicles, etc. 

Other limitations of the MSRRA are:

  • If the spouse does not follow the service member to the deployed or assigned state for duty, the spouse is no longer covered by the MSRRA relief act.

  • Each state has laws concerning the circumstance of what proves to be shown to establish a domicile in another state. 

  • The military spouse's driver's license is imposed by state law, not the MSRRA. These laws vary according to the state.

  • Assuming the spouse does not establish a domicile home before marriage under the MSRRA, you can claim the state of your service member under the Veterans Benefits and Transition Act of 2018.


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