THE MILITARY SPOUSES RESIDENCY RELIEF ACT HELPS MILSPOUSES NAVIGATE FREQUENT MOVES
Let’s face it, moving to a new state is a pain. PCSing has plenty of challenges, with none more annoying than getting your affairs in order. This includes things like how you file your taxes, your licenses, voting, etc. Furthermore, complications can arise for families where one spouse is serving in a state but another lives elsewhere. You have enough to worry about when moving. Thanks to the Military Spouse Residency Relief Act (MSRRA), milspouses don’t have to worry about changing their state of residence, simplifying your relocation.
What Is the Military Spouses Residency Relief Act?
The Military Spouses Residency Relief Act is legislation that allows spouses to keep their legal residency as their spouse if they live in the same state. It’s an amendment of the Servicemembers’ Civil Relief Act (SCRA) that came about in 2009, as a way to help simplify processes for military families.
Furthermore, the SCRA was amended again through the Veterans Benefits and Transition Act of 2018, so that milspouses can choose to use their qualifying service member’s state of residence as their own.
MSRRA Eligibility
If you’re interested in using the MSRRA for your residency, you’ll need to qualify by meeting this criteria:
- Qualifying service member must be living in a state that they are not a resident of due to military orders.
- The milspouse qualifying for MSRRA eligibility is living in that state for the sole reason of living with the qualifying service member. Moving for tax purposes is not allowed.
- Both parties must have the same state residency.
Income, Taxes, and Voting
If you are a milspouse that meets the eligibility of the Military Spouses Residency Relief Act, your income taxes only apply to your state of residency. This is also the state you’re allowed to vote in.
Furthermore, the Veterans Auto and Education Improvement Act of 2022 updated SCRA tax residency laws, allowing milspouses and service members to maintain residence in the spouse’s home state or a former legal residence.
A military spouse’s income is taxed based on their state of legal residence, while non-military income earned by service members is taxable in the state where it is earned.
However, both spouses may need to file state taxes on other income, such as rental property income, in the state of earning.
If you're a service member and a business owner, things get a little more complicated.
While everyone should always consult legal and tax professionals to understand the implications of the MSRRA and SCRA, it's especially vital for those operating a business.
Professional Licenses
Moving can be a hassle when it comes to professional licenses. Depending on your industry, it’s a very time-consuming process that may not be realistic to switch from state to state, plus, it’s costly and stressful.
Thanks to the Veterans Auto and Education Improvement Act of 2022, the SCRA had its “Portability of Professional Licenses of Servicemembers and their Spouses” section added which provides service members and military spouses permission to maintain their professional licenses and certificates under these circumstances:
- A service member has moved because of military orders.
- You have provided a copy of these orders to the licensing authority in your new residence.
- You are actively using your license or certificate—this means during the two year period right after you move to your new residence.
- You are in good standing with the licensing authority that issued your license or certificate as well as the other licensing authorities issuing valid licenses or certificates that may apply and/or are similar in nature.
- Finally, you follow the regulations of the licensing authority in your new jurisdiction when practicing. This includes disciplines and maintaining continuing education requirements of your residence.
How to File Using the Military Spouses Residency Relief Act
Filing your taxes using the MSRRA is complicated and operates differently depending on the state you’re in.
For example, if you are stationed at Fort Cavazos (previously known as Fort Hood), you won’t have the income tax implications of someone stationed at Fort Campbell because Texas doesn’t have income tax but Kentucky does.
Because MSRRA and filing differ from state to state, it’s important to file with a licensed financial professional.
Furthermore, this guide is not financial or legal advice and should only be used as a reference. To learn more about the Military Spouses Residency Relief Act, be sure to access the free legal assistance available at your installation.
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