Military Spouses Residency Relief Act: State Tax Rules

By SSgt Christian Horton

Page updated: October 21, 2026 · Official guidance last changed: January 5, 2023

A servicemember's orders can send a family across several states, and each move raises the question of which state a spouse owes income tax to. This guide walks through what 50 U.S.C. 4001 says about spouses: how domicile is protected, the election among three choices, when a spouse's wages are not treated as earned in the duty state, and what the statute says about personal property. It also marks where the federal text stops and each state's own rules begin.

What the statute covers

The text comes from 50 U.S. Code Section 4001, titled Residence for tax purposes. It was formerly section 511 of the Servicemembers Civil Relief Act. The spouse provisions were enacted by Pub. L. 111-97 of November 11, 2009, and later amended, including the election now in (a)(3). The rule is commonly called the Military Spouses Residency Relief Act. That name is not used in the codified text or in IRS Publication 3, so this guide refers to the rule by its citation, 50 U.S.C. 4001. Subsection (f), which covers an Indian servicemember whose legal residence or domicile is a Federal Indian reservation, is outside the scope of this guide.

The statute defines a tax jurisdiction as a State or a political subdivision of a State, so the protections reach cities and counties as well as states.

Domicile and residence of the spouse

Subsection (a)(1) deals with the servicemember. A servicemember neither loses nor acquires a residence or domicile for purposes of taxation, with respect to the person, personal property or income, by reason of being absent or present in any tax jurisdiction of the United States solely in compliance with military orders.

Subsection (a)(2) gives the spouse a parallel rule. A spouse of a servicemember neither loses nor acquires a residence or domicile for purposes of taxation, with respect to the person, personal property or income of the spouse, by reason of being absent or present in any tax jurisdiction of the United States solely to be with the servicemember in compliance with the servicemember's military orders.

Two ideas carry most of the weight: the word solely and the requirement of compliance with military orders. The spouse's presence in the jurisdiction has to be solely to be with the servicemember, and the servicemember's presence has to be in compliance with military orders. The statute does not describe what happens when a spouse is in a state for another reason, such as a civilian job the spouse chose in that state. The statute does not address that situation, and a state tax agency can say how it treats it.

The election among three choices

Subsection (a)(3) is the election. For any taxable year of the marriage, a servicemember and the spouse may elect to use for purposes of taxation, regardless of the date on which the marriage occurred, any of the following: the residence or domicile of the servicemember, the residence or domicile of the spouse, or the permanent duty station of the servicemember.

Three details stand out in that sentence. The election is made year by year, the date of the marriage does not limit it, and it is made by the servicemember and the spouse. The statute does not say how a state records the choice on its return, so each state's instructions control that point. It also does not say how electing the duty station interacts with subsection (c); a state tax agency can say how that works in a given state.

IRS Publication 3, the Armed Forces' Tax Guide, describes the same idea from the civilian spouse's side. It says a civilian spouse of an active duty servicemember can elect to have the same domicile or residence as the servicemember. It adds that if the spouse's domicile or residence is the same as the servicemember's, the spouse may be able to keep a prior domicile or residence for tax purposes when accompanying the servicemember to a new duty station.

Spouse wages and the duty state

Subsection (c) addresses earned income directly. Income for services performed by the spouse of a servicemember shall not be deemed to be income for services performed or from sources within a tax jurisdiction of the United States if the spouse is not a resident or domiciliary of the jurisdiction in which the income is earned because the spouse is in the jurisdiction solely to be with the servicemember serving in compliance with military orders.

Read in order, the sentence has three conditions. The income is for services performed by the spouse. The spouse is not a resident or domiciliary of the jurisdiction where the income is earned. And the reason for that status is that the spouse is there solely to be with the servicemember who is serving in compliance with military orders. When all three hold, the statute says the wages are not deemed income from sources within that jurisdiction.

Subsection (b) is the matching rule for the servicemember's own pay. Compensation for military service is not deemed to be income for services performed or from sources within a tax jurisdiction if the servicemember is not a resident or domiciliary of the jurisdiction where the servicemember is serving in compliance with military orders. Subsection (e) adds a limit: a tax jurisdiction may not use the military compensation of a nonresident servicemember to increase the tax liability imposed on other income earned by the nonresident servicemember or spouse that the jurisdiction taxes.

The guide State tax and drill pay covers the servicemember side for reservists, so this guide concentrates on the spouse.

Personal property

Subsection (d) removes some personal property from the duty state's reach. The personal property of a servicemember or the spouse of a servicemember is not deemed to be located or present in, or to have a situs for taxation in, the tax jurisdiction in which the servicemember is serving in compliance with military orders. Subsection (g) defines personal property as intangible and tangible property, including motor vehicles.

The statute attaches three qualifications.

• The rule applies to personal property or its use within any tax jurisdiction other than the servicemember's or the spouse's domicile or residence.
• It does not prevent taxation of personal property used in or arising from a trade or business, if the jurisdiction has jurisdiction.
• Eligibility for relief is not contingent on whether such taxes are paid to the State of domicile.

For vehicles, subsection (g) defines taxation to include licenses, fees or excises imposed with respect to motor vehicles and their use, if the license, fee or excise is paid by the servicemember in the servicemember's State of domicile or residence.

Domicile, community property and Publication 3

Publication 3 defines domicile as the permanent legal home a person intends to use for an indefinite or unlimited period, and to which, when absent, the person intends to return. It states that domicile is not always where a person presently lives. That distinction explains why the statute talks about residence or domicile rather than physical location.

Domicile also decides whether community property rules apply, although that topic is separate from the spouse rules above. Publication 3 says Armed Forces pay may be subject to community property laws depending on marital status, the nature of the payment and domicile. The community property states it lists are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Community property rules apply to married persons whose domicile during the tax year was in a community property state, and the publication says these rules may affect tax liability when separate returns are filed or when a couple divorces during the year.

Worked example with an invented couple

The couple below is invented, including the names and the dollar figure. Sergeant Marcus Rowe and his spouse Dana Rowe do not exist, and the states are left unnamed. The example only applies the statute's wording, and it assumes the couple has not elected State B's duty station for the year.

The arithmetic in step 3 is short. If State B treated the $42,000 as earned there, State B would tax it as income from sources within State B. If the conditions in subsection (c) hold, the statute says the same $42,000 is not deemed income from sources within State B. The statute does not supply a tax rate, a form or a withholding rule, so it cannot convert $42,000 into a tax bill. That conversion depends on State A and State B law, which the statute does not set out.

Limits of this guide

The statute states principles. It does not say how any state turns them into a return. This guide does not resolve the points below.

• Each state's forms: which form, schedule or statement records the election in subsection (a)(3).
• Withholding: how an employer in the duty state is told to stop or reduce withholding on a spouse's wages, and what documents it may require.
• Individual state rules: how any named state defines resident, domiciliary, or presence solely to be with the servicemember.

A short checklist

• Write down each spouse's domicile at the start of the year and any date a move took place.
• Note whether each move was solely to be with the servicemember under military orders, using the statute's wording.
• List the three election options in subsection (a)(3) and which one the couple used in each earlier year.
• Read the relevant state tax agency's instructions for military families, since the federal text does not cover state forms.

Sources

• 50 U.S. Code Section 4001, Residence for tax purposes
• IRS Publication 3, Armed Forces' Tax Guide

Related guides

• State tax and drill pay
• Taxable vs tax-free military pay
• PCS moving expense deduction
• Other tax breaks

See the Active Duty hub →