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"Where are you from?" is often one of the most difficult questions to answer as a member of a military family. How do you answer when you have lived in a new place every three years? Is it where you are born? Is it the place you have lived the longest? Although we are free to choose where we tell people we are "from", it is not as easy to choose or know which state we claim legal residency in (also referred to as domicile).

 

In 2009, congress passed the Military Spouse Residency relief act which makes it possible for military spouses to have similar rights as their active duty counterpart. This prevents military spouses from automatically losing residency in their home state and grants them the option to become a resident in a state for voting, drivers license renewal and tax purposes when PCSing to a new state.

 

It is important to be proactive about what state to pursue residency in. Make sure you are not paying unnecessary taxes, extra money to re-register your vehicle or get a new drivers license, etc, in your new state, when it is not required. I encourage you to talk to your spouse and research the state specific benefits and requirements of claiming residency. It is not as simple as "choosing". You must be able to show that you have established a domicile. Generally, it helps to have a state driver's license, your vehicle registration and voter registration in the state you are claiming to be your domicile. You can find state specific requirements on each state's government websites.

 

Normally, your income would be taxed by the state you work in, but this act allows you to be taxed by your state of domicile. This is an advantage, especially if your domicile is in one of the seven states which do not charge income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming (nine if you include New Hampshire and Tennessee who charge tax only on income earned through interest and dividends. The first step is determining whether you are eligible to forego paying income taxes in the state you currently reside. In my recent move to California, I did not do the proper research and mistakenly paid Californian state income taxes. This was unnecessary since I meet the criteria and can prove Texas residency. According to the Federation of Tax Administrators, the military spouse is eligible if:

 

  • Currently resides in a state different than the state of his/her domicile;
  • Resides in the state solely in order to live with the service member; and,
  • The service member is present in the state in compliance with military orders.
  • The spouse and the service member both are able to claim the same domicile.*

*Only a requirement in certain states.

 

If you meet the criteria, contact your employer and find out what forms they need to ensure they withhold state income taxes from your paychecks. Once you have the right information, you may be eligible to get taxes back from 2009 (since this act was passed).

 

You do not have to figure this out on your own! This is a complicated law because each state has differing rules and requirements. I encourage you to use the resources available to get free and confidential advice from a legal assistance office. Legal assistance offices can be found near you using the U.S. Armed Forces Legal Assistance website.

 

Here are some helpful resources:

 

2 Comments
Military Nomad
Contributor
Unfortunatetly, Virginia is one of the states that you have to become a resident if you do not have the same domicile as your military spouse. Plus...if your vehicles are in both names, the non-military spouse has to pay taxes/ fee. We changed both vehicles to his name to avoid this.
Zman-
New Member
The fact that different states can interpret this law differently really messes this law up.