SUBJECT: President signs bill, aids military spouses
The President signed a bill Nov. 11 to help ease the strain on military families who frequently travel from state to state and country to country. President Barack Obama signed the bill, known as the 'Military Spouses Residency Relief Act,' as an amendment to the 2003 Servicemembers Civil Relief Act. The MSRRA allows military spouses to claim residency in the same state as their sponsor and retain that residency as long as the servicemember is in
the military. For more than 60 years, servicemembers have had the privilege of keeping
residency in the same state no matter where they traveled. This means servicemembers pay income taxes to their home state, and they don't have to change their driver's license or vehicle and voters registration during each permanent change of station. Spouses now have these same privileges. "Prior to the passage of the amendment, a servicemember's spouse had to change his or her legal residence with every (permanent change of station)," said Capt. David Cromwell, an assistant staff judge advocate at Incirlik Air Base. "Now, the spouse can retain the same legal residence as the active-duty servicemember so long as the spouse once shared that legal residency. This not only provides the military spouse with a stable legal residence, but also it has significant tax implications." Abbey Yates, the 39th Comptroller Squadron assistant and wife of 1st Lt. Kyle Yates of the 39th Security Forces Squadron, recently switched her residency back to her husband's home of record and said this bill will really help her in the years to come. "That will be the last time I'll ever have to do all that paperwork," Mrs. Yates said. "Not only do I get to keep my residency with a tax-free state, but I never have to do that paperwork during a PCS again. I'm really excited they passed this bill." There are states such as Texas, Florida, South Dakota, Washington and others that are well-known for being tax-free for their residents. "If a servicemember's spouse has ever been a resident of a tax-free state while married to the servicemember and is only absent from the state due to the servicemember's military duties, the spouse can now regain that legal residency," Captain Cromwell said. "Since income earned by a spouse will now be treated the same as military income, a spouse will only have to pay taxes
to his or her state of legal residency. If that state is a tax-free state, then the spouse does not have to pay taxes even when the income is earned in a state that has an annual income tax." A military spouse can now claim residency in the same state as their active-duty spouse regardless of their current residency as long as they have previously acquired that residency during some point of their marriage. "The law permits military spouses to reach back and regain that residency no matter how long ago it was," Captain Cromwell said. "However, the law does not create the right to pick, choose or claim just any state of legal residence. The spouse may only regain the right to claim the same state of legal residence as their military spouse if they had once established such residency. A spouse cannot just claim the active-duty member's legal residency based purely on the marital relationship." Although the MSRRA was passed to help relieve stress on military families during hectic times, remember there are requirements to changing your legal residency, Captain Cromwell said. "With these new changes, state tax authorities will most likely scrutinize our legal residencies since they will lose revenue," he said. "They will look at spouses and the active-duty member, since it is the active-duty member's status that determines whether or not the spouse is entitled to the protection. Military members and their spouses must maintain sufficient ties to their legal residence. Claims of changed residency that have no basis in fact may be viewed as fraudulent by state taxing authorities and subject the military family to significant additional taxes and penalties." For assistance with the MSRRA, contact your local legal office to setup a legal assistance appointment.
