The president recently signed into law the Military Spouses Residency Relief Act (MSRRA), which among other things, provides that when a service member leaves his or her home state in accord with military or naval orders, the service member's spouse may retain residency in his or her home state for voting and tax purposes, after relocating from that state to accompany the service member.
Military personnel have had the ability to claim a state of residence and maintain that residency regardless of where military orders may send them. Before this legislation passed, spouses did not have the same benefit.
When determining whether you want to maintain residency in the state to which you’ve relocated to accompany your service member spouse or your home state, there are a few factors to consider.
- Where do you want to vote?
- Where do you want to register your car(s)?
- Where will you file state income taxes or will you file them at all (several states have no state income tax)?
- Will your residency choice affect tuition rates at a college or university?
- Check the impacts on county and local taxes, fees and services.
- Is your state of residency a community property state?
- How will your state of residency affect your insurance rates – home, auto, business?
- Ensure your will, Power of Attorney, and other estate planning will be valid in your state of residency.
- Are there any college savings plans tax breaks in one state versus another?
- How will a different residency affect you if you own or operate your own business?
- Will property rights change if you opt for residency in one state versus another?
- How will personal property taxes be affected if you change your state of residency?
Check your state’s department of revenue web site for tax form changes related to MRSSA. Contact First Command Tax Services for more information.
First Command Tax Services is the exclusive tax preparation service of First Command Financial Planning, Inc. (Member SIPC, FINRA). This article is provided for information purposes only and should not be considered tax or legal advice. Should you require tax guidance specific to your situation, please contact a tax or legal professional.