As active duty service members and their spouses, you’ve benefitted from laws that allow you to maintain your legal residence somewhere other than where you actually live. However, these federal laws no longer apply once you leave the military. So what happens then?
In short, you become a legal resident of the place where you physically reside.
The mechanics of how this happens will vary depending on the specific state and whether you are already living there or are moving there for the first time. If you are already residing in that location, imagine that your separation from the military is as if you were moving to that location. Because from a legal perspective, that’s exactly what’s happening.
Moving Your Legal Residence
Most states have a 30 or 60 day deadline to take all the required actions. So what do you need to do to demonstrate that you now live in a new place?
- Register to vote
- Get a local driver’s license
- Register your vehicles
- Vehicle insurance should already be where your car is located, so you won’t need to change that if you aren’t actually moving. But you may need to update your insurance to show your car is now registered where it lives
- Set up state income tax withholding on all sources of income, if the state has a state income tax
- Update the address on your healthcare, if appropriate. Remember that moving is a Qualifying Life Event, allowing you to change your Tricare plan without waiting for an open season.
- Transfer any professional licenses that are managed at the state level
In some states, there may be significant penalties for not completing these tasks in a timely manner. For example, in Maryland, you have 60 days to move your vehicle registration. If you go beyond the 60 day requirement, you won’t be eligible for a credit on the sales taxes you paid on your vehicle. This means that you’ll have to pay sales tax on the value of the vehicle on the date that you brought it to the state. Ouch!
Take Advantage of Any Benefits
On the flip side, be sure that you take advantage of any benefits you will receive as a legal resident of that “new” state. For example, you may be able to register for a homestead exemption on property that you own.
Changing your state of legal residence feels weird when you’ve been a resident of the same place for many years. But it’s got to be done, and it needs to be done in a timely fashion. Yet another adjustment in the process of leaving military life and exploring what it’s like to be a civilian. Welcome to the other side!
This is great info. I maintained residency in my “home of record” state throughout my entire career because they didn’t levy state taxes on military members who didn’t live there. When it came time to retire, I was lucky that my last duty station was in Florida, making it financially advantageous to establish residency there. While the process is the same, I imagine it’s a lot more difficult to suddenly find yourself transitioning to residency in a state with income taxes.