The military can be confusing, with all its special terms and acronyms. One of the terms most often misused is home of record. The term comes up in questions about taxes and driver’s licenses and final moves. On rare occasions, when talking about final moves, it’s being used properly. The other 99.9% of the time, folks are actually talking about state of legal residence. It’s a pet peeve of mine. Not using the right term can mean getting the wrong answer to your questions.
Home of Record
A service member’s home of record is the place from which they entered the military. That’s it.
The only time your home of record matters is when you leave the military before reaching retirement. Then, your final travel entitlements are based on your home of record.
There are no provisions to change your home of record unless it is erroneously recorded when you enter the military, or you have a break in service. Lots of people may tell you that you can change your home of record when you reenlist. According to the Joint Travel Regulations, said reenlistment must include a break in service of at least one day.
From the Joint Travel Regulations, Appendix A, Home of Record:
“The place recorded as the individual’s home when reinstated, reappointed, or reenlisted
remains the same as that recorded when commissioned, appointed, enlisted or inducted or ordered into the tour of
active duty unless there is a break in service of more than one full day. Only if a break in service exceeds one full
day may the Service member change the HOR.”
The Army regs say it a little differently, but say the same thing:
From Army Regulation 600-8-104, Army Human Resources Records Management, Chapter 5, Section 5-2, subsection b:
“Home of record can only be changed if there is a break in service of more than 1 day or to correct an error. Any
change in connection with a break in service must be recorded on the DD Form 4 at reenlistment.”
Military spouses do not have a home of record.
State of Legal Residence
Your state of legal residence is the state where you’ve demonstrated that you have permanent ties. In theory, this is the place that the service member thinks of as home. At a deeper level, “home” would be the state where you intend to live after you leave the military.
In reality, it is probably the most tax-friendly state you’ve ever been stationed in. However, understanding the intent behind the laws helps to understand how the process works.
The steps you take to obtain and preserve legal residency in a state are the same steps you would take with in a state that you consider home.
For example, in the state you consider home, you would:
- maintain your driver’s license
- register your vehicle
- register to vote
- actually vote
- pay state tax
- claim as your state in your will
- any other actions that could be construed as showing intent to remain a resident of a state
Understanding Intent and Why It Matters
Intent is one of the most misunderstood and difficult parts of legal residency. There are a number of steps that you can take to demonstrate your intent. But it is the cumulative effect of these small things that adds up to the whole of determining legal residency.
If you’re claiming a previous state of legal residence while physically residing in a new place, you have to be careful not to do anything that might give the impression that you’ve actually become a legal resident of the new state.
Just as no single action will establish your legal residence in a state, no single action automatically makes you NOT a resident. For example, if your PCS to Ohio, military spouses are required to obtain an Ohio driver’s license. That doesn’t automatically mean you give up your legal residence in a prior state. Rather, you would have to take several actions that demonstrate that you are changing your legal residence.
In general, though, it’s good to keep things tied to your state of legal residence. While it can seem easier to switch things around as you move, it is important to clearly demonstrate your intent. It’s hard to defend your intent when you have a driver’s license from one state, a vehicle registration in a second state, you’re registered to vote in a third state, and you’re claiming a homestead tax exemption in a fourth state.
States can and do pursue military members who are aren’t keeping things clear. It can be an expensive and time-consuming battle, and you won’t win if you haven’t made your intent clear.
Being able to claim a state of legal residence that isn’t the state in which you actually live is governed by federal laws. The Servicemembers Civil Relief Act (SCRA) is the law that gives military members and spouses certain protections. The intent of SCRA is that service members and spouses are not unnecessarily burdened by the need to change their residence with every move. This includes the right to continue voting and paying taxes in the state they call “home.”
The Military Spouses Residency Relief Act (MSRRA) amends the SCRA to extend some of the voting and tax protections of the SCRA to military spouses. While the MSRRA is its own legislation, it is legislation that changes the SCRA, so the SCRA is the actual law that covers this stuff for both the service member and the spouse. After MSRRA, the SCRA was further amended in 2018 and 2023.
The SCRA permits a military member to retain properly-obtained state of legal residence even though they’ve moved to another state on PCS orders. SCRA does not permit a military member to pick any state or regain legal residency in a state where they lived previously.
Service Members and State Taxes
Under the provisions of SCRA, military service members can attribute their military pay to their state of legal residence and not the place where they are living on military orders. The 2023 amendments to SCRA say that a service member may use any of these locations for tax purposes:
- either their state of legal residence
- their spouse’s state of legal residence
- or the state where they are stationed
However, if they have non-military income in a state, then that income is taxed in the state where it is earned.
This includes income derived from rental real estate. If you own a property somewhere that has state income tax, you need to file an income tax return in that state regardless of where you are a legal resident.
Military Spouse and State Taxes
The 2023 changes to SCRA give military spouses the right retain a properly-obtained state of legal residence, even if they move due to Permanent Change of Station (PCS) orders.
The 2023 amendments to SCRA say that a service member may use any of these locations for tax purposes:
- either their state of legal residence
- their active duty spouse’s state of legal residence
- or the state where they are stationed
An interesting twist of the way that these laws were written is that all the earned income of the military spouse is permitted to be attributed to their state of legal residence, or their active duty service member’s state of legal residence that the military spouse is using for tax purposes. This is different from service members, who only get to attribute their military income to their state of legal residence and must pay taxes on any other income in the respective state. For example, if the service member has a part-time job or side hustle, that income will be taxed where it is earned. I’ll also note again that rental property income needs to be reported and taxed, if appropriate, in the state where the property is located.
SCRA does not permit a military spouse to obtain legal residence in their spouse’s state of legal residence without actually living there.
Changing Your State of Legal Residence
You may change your legal residence whenever you meet the requirements to establish residency in a new state. While every state is slightly different, you generally must:
- Be physically present in the new state, and
- Demonstrate that you intend to make that location your permanent home; and
- Demonstrate that you intend to abandon your old state of legal residence.
You demonstrate that you intend to make a state your new permanent home by doing the things listed above: registering to vote (and actually voting), obtaining a driver’s license, registering your vehicles, etc.
Once you’ve taken the steps to properly establish a new domicile, you can change your declared state of legal residence using DD Form 2058, State of Legal Residence Certificate. This will change the state listed on your Leave and Earnings Statement and W-2 tax statement, and DFAS will start withholding taxes for that state, if required. Remember that naming a state on the form does not make you a legal resident of that state – you still need to take all the other actions required.
State of Legal Residence for a Specific Purpose
Another thing that is confusing is that sometimes you are considered a legal resident of a state for a particular purpose without giving up your actual state of legal residence. Examples might be college tuition or jurisdiction for divorce. Being considered a resident for a specific purpose does not mean that you’ve become a legal resident for other purposes.
When Other Folks Misuse The Terms
Sometimes you’ll run into individuals, government entities, and even laws that use the terms incorrectly. For example, a state may require that you be a legal resident in order to qualify for in-state tuition, but they may use the term “home of record.” This can cause a lot of confusion. You’ll just have to be patient and ask specific questions to find out exactly what they’re trying to say.
In many conversations, you can use these two concepts interchangeably, and it won’t make a difference. It’s still a bad idea, though. You can’t always tell ahead of time which conversations need to have the right concept. Understanding the difference and using the words accurately will prevent misunderstandings that can cost you time and money.
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