Military Spouses Residency Relief Act Published Feb. 3, 2010 92nd Air Refueling Wing Legal FAIRCHILD AIR FORCE BASE, Wash. -- On Nov. 11 2009, the Military Spouses Residency Relief Act was passed into law. This new law allows a spouse of a service member on military orders to be exempt from paying state income taxes in a state to which he or she moved solely to live with that service member. In layman's terms, this law provides military spouses the ability to retain a fixed state of domicile for state income tax purposes, which in effect brings the treatment of spouses of service members closer in line to the benefits that have long been enjoyed by the service members themselves. How does this law help you as a spouse? If you are domiciled in one of the nine states that have no broad-based income tax (namely, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming), and move to a state which collects income tax, you will not owe state income taxes on any money you make while working in the new state. What if you are moving from a state that collects income tax to one of the nine states mentioned above that has no income tax? You can change your state of domicile to the new state that does not collect state income taxes. This would benefit you if you later move to a state that does collect state income taxes. How can you change your domicile? Establishing a given state as your "domicile" can be a tricky thing and the ways of doing that can vary from state to state. However, the key is to establish enough connections with the new state to provide sufficient evidence of your intent to remain permanently in that state. You can show this intent by doing some or all of the following things in the new state: getting a driver's license; registering your vehicle; opening a bank account; joining a local club or church; or buying a home or other property. One of the strongest ways to show evidence of your intent to remain in a given state, which is acknowledged by most states, is by registering to vote in the new state. Note: you must have at least lived in a state to establish domicile there; you may not simply adopt your military spouse's state of domicile as your own. These are the basics of this new law, but some issues can be tricky. For instance, some states mandate that in order for this new law to apply, the spouse must claim the same state of domicile as the service member. Another question may be regarding what can be done with the taxes that a spouse already paid to a state that is not their state of domicile. For further guidance on these and other subtle issues related to this new law, please stop by the base legal office and pick up a handout on this topic. Or, if you would like to speak directly to an attorney about this, our walk-in hours are Tuesday and Thursday from 8 to 9 a.m.