Military Spouse Residency Rules

Normally, when you move to a new state, you become a resident of that state. You then file taxes as a resident of the new state.

However, if you’re the spouse of a military service member, you fall under special rules. The Military Spouses Residency Relief Act (MSRRA) lets you keep the same state of legal residence as your service member spouse. This way, multiple states and tax localities won’t tax you when your spouse moves for military service. 

The military spouse residency rules state that if you’re the spouse of a service member, you don’t lose or get a state of domicile or residence for taxation purposes when you move. This is true only if the you meet these requirements:

1. You go with the service member to a duty station state outside your home state due to military orders.
2. You’re in the duty station state solely to be with the service member. 

If you meet these requirements, your income while in the duty station state won’t be taxed by that state. However, your home state might still tax that income. Similarly, the duty station state can’t tax your property.

So, if you meet the requirements of the Military Spouses Residency Relief Act, both your income and the military income earned by your spouse in the military are free from taxation in the duty station state. Both spouses are subject to tax (income and property) in their home states.

Additionally, the Veterans Benefits and Transition Act of 2018 (VBTA) allows the spouse of a military member to use their spouse’s state of residency beginning in 2018. This is the case even if the spouses did not share the same state residency prior to the deployment.

Ex: Major Hannah Jones is a legal resident of New Hampshire. Major Jones receives PCS orders relocating her to California. In 2018, Major Jones marries Carl Price who is a resident of Vermont. Carl relocates to live with Major Jones and takes a job in California. Under the VBTA, Carl may elect to treat New Hampshire as his state of residence even though he never lived there.