The Military Spouses Residency Relief Act allows a service member’s spouse to retain his/her state of residency for income tax purposes. In 2003 the service member’s civil Relief Act provided that the service member could retain their state of residency for income tax purposes but it wasn’t until 2009 that the Act was amended and spouses were guaranteed the same relief.
On the surface this seems like common sense and one wonders why a law had to be enacted. But let’s look at an example: My son is in the Navy and his home state is Colorado. Let’s say he marries his hometown sweet heart. They both come from Colorado so it makes sense to file a married filing joint return for Colorado even when he is stationed in California.
Now let’s say he doesn’t marry the hometown sweetheart but a gal he met while stationed in California. Does he now file a Colorado return and she files a California return? Let’s say he stays in the Navy for 20 years and moves around every 3 years, do they always file one Colorado return and one California return as long as he is in the Navy but once he retires they then file a joint return for whatever state they now call home?
As with all tax laws this seemingly common sense issue now requires some thought and probably some research. Thankfully my son is not getting married yet so I’ll wait to dig into the research until necessary. I hope you had a safe memorial day and took time to remember those who lost their life so that you could be free.