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Category: General Questions

Military Spouses Residency Relief Act

This act, which was signed into law in 2009, provides the military spouse with the same residency status as the serviceman if the spouse meets all of the following conditions:

a. Currently resides in a state different than the state of his or her domicile
b. Resides in the state only in order to live with the service member
c. The service member is present in the state in compliance with military orders.

In some cases the spouse should prepare a Non-resident return for the state where the income was earned and enter these wages in as a Subtraction to income. This removes them from any tax liability for this state; however, they must then claim this income on their state return where they do claim residency. As each state has specific instructions filers should check their state guidelines in our Military/States section.

Some states also require that the spouse and service member both are able to claim the same domicile.

EXAMPLE: In Indiana a spouse of a nonresident military service member may not owe tax to Indiana on earned income from Indiana sources. The spouse may be eligible to claim a deduction if:
- Indiana is not the military servicemember's state of domicile as reported on the servicemember's Form DD-2058
-The military servicemember and spouse are domiciliaries of the same state
-The military servicemember is in Indiana in order to live with the servicemember, and resides at the same address; or
-The military servicemember and spouse live together in a state other than Indiana, but the servicemember's spouse works in Indiana; and
-The Indiana-source income is included on Indiana Schedule A on line 1B, 2B and/or 7B

Please Note:

1. A state cannot tax income earned in that state by the military spouse if the military spouse and Soldier both have established domicile outside the state and are present in the state solely due to the Soldier being assigned to that state.

2. The MSRRA does not change how domicile is established, or maintained, and does not provide a means for a spouse to simply choose the same domicile as the Soldier.

3. A Soldier who is not a domiciliary of the state but earns non-military income in that state is still subject to state taxation on the non-military income earned in the state.

For specific instructions regarding how each state treats the spouse's of military members you may refer to the articles listed within the Military State Information section of this program.