The president has signed the a bill that permits military spouses to choose the legal residence of their service member without having to actually live there and fulfill the other residency requirements. S. 2248 (115th): Veterans Benefits and Transition Act of 2018 has a provision that states:
“For any taxable year of the marriage, the spouse of a servicemember may elect to use the same residence for purposes of taxation as the servicemember regardless of the date on which the marriage of the spouse and the servicemember occurred.”
Now, I am not in love with the language of this bill. It reflects a basic misunderstanding of the problem with the old law. But that’s not the important part – the important part is that now military spouses can choose to use the same state as their service member, which makes them eligible for protections under the Military Spouses Residency Relief Act (MSRRA) as it amends the Servicemembers Civil Relief Act (SCRA). This is great news!
Military Spouses Residency Relief Act
The MSRRA amended the SCRA to allow military spouses to retain a previous state of legal residence, as long as it was the same state of legal residence as their active duty spouse. This was great for families who were able to live together in their desired state of legal residence, but did nothing for families who had never been stationed there together. This created a two-tier system, with some military spouses benefiting from the law and other spouses still needing to change their legal residence with each move.
What This Law Does
This law (assuming no one challenges the poor wording) permits the spouse to elect the same legal residence as the active duty service member, without having to physically live in the state and meet the other residency requirements.
Why We Care
Well, the first reason we care is because the old law only helped some spouses.
The second reason is because this makes life soooooo much easier. No more having to figure out whether you’ve moved to a “same state” state or a “whatever state.” Don’t know what I mean? It doesn’t matter, because this law makes that problem go away.
Lastly, this may save you some money. Many active duty service members have managed to establish residency in states with no state income tax. Under this law, all military spouses will be able to claim that same state for purposes of income tax (and voting!), meaning that a lot of folks will be able to take advantage of no state income taxes.
Fingers crossed, there will be no challenges based on the way the law was worded, and this will work exactly as planned, and tax time will be SO much easier!
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