MSRRA
MSRRA: Military Spouses Residency Relief Act
Military spouses can claim the service member's State of Legal Residence as their own for state-tax purposes, even if they're physically living in another state due to PCS orders.
Details
Military spouses can claim the service member's State of Legal Residence as their own for state-tax purposes, even if they're physically living in another state due to PCS orders. Effectively extends the SLR no-income-tax play to the spouse's W-2 income.
Restrictions
The spouse files a non-resident return in the duty state claiming MSRRA, and a resident return in the service member's SLR. Most state tax forms have a specific MSRRA checkbox. Spouse income tax savings can run $3,000-$10,000+ per year for a working spouse in a high-tax duty state with a TX/FL/NV SLR. File an updated W-4 with the employer claiming exempt for state taxes once MSRRA is established.
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