Tax Relief for Spouses of United States Military Servicemembers

On November 11, 2009, President Obama signed into law the Military Spouses Residency Relief Act. The Act is effective beginning for 2009 tax year.

The Act provides that a spouse shall not lose or acquire the domicile or residence in a state when the spouse is present in the state solely to be with the servicemember in compliance with orders that result in each residing in the same state.

The effect of the Act prohibits a state and local government of military residence to tax income earned by a spouse of a servicemember stationed in that state if (1) the service-member is present in that state solely in compliance with military orders; and (2) the spouse is in the state solely to be with the servicemember; and (3) the spouse is domiciled in the same state as the servicemember. All three conditions must be met to qualify for the exception.