Military families frequently move from place to place, requiring much effort and changes. Many military spouses are met with challenges such as moving to a new state, moving away from family and friends, or even giving up a promising career. MSRRA, or Military Spouse Residency Relief Act, has assisted military families in residency, voting, and taxes.
Reasoning Behind this Act
This law is meant to help military spouses maintain residency in the state where they resided before their active-duty spouse is stationed elsewhere. It provides many more protections and benefits for these families.
Relocating can be challenging, but relocating as a military spouse or family presents unique situations that many are unprepared for. Moving requires a lot of coordination, including planning (especially if moving cross-country), finding a new job, and finding a home. Just a few years ago, moving for a military spouse required them to change their state of residency. Fortunately, the MSRRA has made it simpler when filing taxes.
When filing taxes and earning an income, you are required to declare residency to determine tax laws for the state that you are living in, and relocating to another state can cause those to change. Changing residency caused military spouses to have to fill out more tax forms and, in the end, led to them paying more taxes than necessary.
How Does this Benefit the Spouses of Service Members?
The SCRA (Servicemembers Civil Relief Act) allows active-duty military members to maintain their legal residence, which they consider home. Every person is required to state legal residency within a state. For most people, their residency is where they live, but service members and their families must relocate more often.
The Military Spouse Relief Act is in place to allow the spouses of service members to maintain the same state of residency as their spouse. With the understanding that these requirements are met:
- The service member lives on military orders that are not their resident state.
- The spouse is in that state solely to live with the service member.
- Both service members and spouses have the same state of residency.
This protects the spouse from paying taxes based on income outside their state of residency.
At AFBN, we understand the challenges of being a military family. If requirements are met for MSRRA, your income as a military spouse will not be taxed by the duty state that you are residing in. Similarly, the duty state cannot tax your property either. However, both spouses are subject to income and property taxes in their home states. To further understand your benefits and tax exemptions, contact AFBN for a free consultation.