President Obama Signs Military Spouses Residency Relief Act

by McGrath North Tax Group

(402) 341-3070

On November 11, President Obama signed into law the Military Spouses Residency Relief Act. Under the Act, when a service member leaves his or her home State in accord with military or naval orders, the service member’s spouse may retain residency in his or her home State for voting, income tax, and personal property tax purposes, after relocating from that State to accompany the service member.

Furthermore, the Act provides that any income the military spouse earns in a state, while present to accompany their spouse under military orders, will not be treated as income from services performed or sources within that state if the spouse is not treated as a resident of that state under the Act.

Service members themselves already had this protection under the federal Servicemembers Civil Relief Act (SCRA). Congress and President Obama were concerned that in some cases military service members were losing the benefits of the SCRA when they owned property jointly with their spouses.  For example, if a family car was not titled in the military service member’s name alone, many states assessed personal property tax on that vehicle.  Furthermore, military families had tax return filing complications – as the spouse was treated as a resident of the new state but the military service member was treated as a resident of their home state.

The Act is effective for any tax year beginning with the year that includes November 11, 2009.

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