Paycheck Chronicles

Income Tax Info on the MSRRA

Well, my previous post on the Military Spouse Residency Relief Act has generated a lot of comments.  I love it!  Obviously, there are many questions about what this Act is going to mean once it is fully interpreted and the individual states change their laws and practices.

Today, I'm going to talk about the income tax aspect of the Act.  This is the part that has interested me the most.  We've usually kept our cars in my husband's name (to make Virginia happy) and I've always kept my Florida driver's license and voter registration.  This was only a problem one time, when I wanted to take some college classes in Virginia, but it was a long time ago and those issues have been resolved by previous legislation.  However, paying taxes in multiple states is annoying and time consuming!  Any change that makes tax time easier is a good change in my book.

While this act was being written and passed, there was a lot of discussion about whether it meant that military spouses would be able to pay income taxes to their permanent residence state instead of the state in which they lived or worked.  Now that the dust has settled, it appears that is the case.  Based upon my reading of individual state replies and President Signs Military Spouses Residency Relief Act, published in the Journal of Accountancy, it seems that military spouses will be able to pay state income tax to the state that they claim as their residence.  If that state does not tax income, then the spouse will not be required to pay state income tax.  Whooohoooooo!!!!  What a blessing for military families.

So far, most information of the information available has come from individual emails that have been published at the Military Spouse Residency Relief Act's Facebook page.  I'm not going to cut and paste them all here - you can click on the link to see what people have heard from your individual state.  However, I will compile a list of links once the individual states begin to publish their new directions online.I know that we're all excited to learn more, but it will take time for it to be organized and implemented.  Hang tight and I'm sure it will all come clear in the coming weeks. Show Full Article

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