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Military Spouse Tax Filing for different state of legal residency

Forum|Forum|5 years ago
June 27, 2020
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My husband and I are currently living in Hawaii. I am a legal resident of Maryland and he is a legal resident of Tennessee. From what I have read, I believe that I do not qualify for any spousal tax relief under SCRA. Does this mean I will have Hawaii taxes to file and Maryland taxes to file? I imagine I will also owe Maryland taxes. Any insight would be helpful!

Best answer by TomD8

If your husband is an active duty servicemember, Section 302 of the Veterans Benefits and Transitions Act of 2018 allows you to claim residency in his military State of Legal Residence (SLR) for purposes of state and local taxes, even if you never lived there. The law went into effect for tax year 2018.

Thus if your active duty servicemember spouse's SLR is Tennessee, you may claim Tennessee residence for state taxes, thus relieving you of any state tax obligation in HI or MD.

https://www.congress.gov/bill/115th-congress/senate-bill/2248/text

For more details, see page 3 of this reference:

https://www.jag.navy.mil/legal_services/documents/Info_Paper_2018_SCRA_Amendments.pdf

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TomD8Answer

If your husband is an active duty servicemember, Section 302 of the Veterans Benefits and Transitions Act of 2018 allows you to claim residency in his military State of Legal Residence (SLR) for purposes of state and local taxes, even if you never lived there. The law went into effect for tax year 2018.

Thus if your active duty servicemember spouse's SLR is Tennessee, you may claim Tennessee residence for state taxes, thus relieving you of any state tax obligation in HI or MD.

https://www.congress.gov/bill/115th-congress/senate-bill/2248/text

For more details, see page 3 of this reference:

https://www.jag.navy.mil/legal_services/documents/Info_Paper_2018_SCRA_Amendments.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Carl11_2

Take note that if your SLR does not tax personal income, then you do not qualify for the MSRRA and all non-military income earned from a Hawaii employer is fully taxable by the state of Hawaii.

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TomD8

@Carl11_2 -- I do not believe that is correct. See the example in paragraph (4) on page 3 of this reference from Navy JAG (note in the example that the servicemember's SLR is tax-free Florida):

https://www.jag.navy.mil/legal_services/documents/Info_Paper_2018_SCRA_Amendments.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.