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Residency and income tax relief

HANSCOM AIR FORCE BASE, Mass. – Among many other protections, the Servicemembers’ Civil Relief Act, or SCRA, provides military taxpayers with relief from double state income taxation.

Per SCRA, service members will not be taxed by multiple states when the service member moves to a different state because of military service.

In 2009, the Military Spouses Residence Relief Act, or MSRRA, was enacted to expand SCRA’s protections to also cover military spouses. Under MSRRA, the spouse of a service member neither loses or gains residence for taxation purposes, either income or property, upon a permanent change of duty station. Thus, MSRRA exempts a military spouse’s income and property from being subject to taxation in multiple states.

For MSRRA protections to apply, the spouse must: 1) accompany the service member to a duty station outside of the home state and be included on military orders; 2) be in-state solely to be with the service member; and 3) be domiciled in the same home state as the service member.

If these three requirements are met, the income earned by the non-military spouse while in the duty station state is not subject to taxation in that state, although such income may be subject to taxation in the spouse’s home state. Similarly, the spouse’s property is not subject to taxation in the duty station state.

It is, however, important to note that all non-military income earned by the service member is still subject to taxation in the duty station state.

For further information on SCRA and MSRRA, please contact the Legal Office at 781-225-1410.