One of the most important – and most misunderstood – laws affecting military families is the Military Spouse Residency Relief Act (MSRRA)*. Enacted in 2009 and updated in subsequent years, the MSRRA is designed to protect the residency rights of servicemembers and their spouses when military orders require a move to a new state.
Why does this matter? Because your state of legal residence (also called “domicile”) determines where you pay state income taxes. For many military families, the right residency choice can mean paying significantly less – or even zero – in state income taxes.
What the MSRRA Does
Before the MSRRA, spouses who moved with their servicemember often had to change their state residency each time they relocated, which meant filing taxes in multiple states and sometimes paying higher taxes. The MSRRA changed that by allowing a military spouse to keep the same state of legal residence as their servicemember for state income tax purposes, even when living in another state due to military orders. Subsequent changes now allow the servicemember and spouse to elect, for state income tax purposes, the servicemember’s state, the spouse’s state, or the state in which they are serving.
Under the MSRRA, if certain conditions are met, a spouse’s wages earned in the duty station state may not be subject to that state’s income tax. This can result in substantial savings, especially if your legal residence is a state with no income tax on wages (such as Texas, Florida, or Nevada).
Why This Matters to You
State income tax rates vary widely. Choosing the right state of legal residence – within the limits of the law – can save you hundreds or even thousands of dollars per year. For example, moving from a high-tax state to a no-tax state under the protection of MSRRA could mean more money in your pocket, without changing your day-to-day life.
However, MSRRA eligibility rules can be tricky. The law requires that:
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The servicemember is in the duty station state under military orders.
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The spouse is in the duty station state solely to be with the servicemember.
Small differences in your situation – such as whether you live together in the duty station state, whether the spouse has W-2 income, or whether you’ve changed voter registration or driver’s licenses – can affect the outcome.
How PIM Tax Services Can Help
At PIM Tax Services, we specialize in helping military and veteran families navigate these rules so you pay the lowest possible state income taxes allowed by law. We’ll help you:
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Understand your eligibility under MSRRA and related laws.
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Determine which state of legal residence is most advantageous for your situation.
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File your taxes correctly to avoid overpaying.
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Amend prior year state returns if you may have paid more than necessary in the past – and help you claim any refunds you’re entitled to.
Try Our MSRRA State Selector Tool
To make things easier, we’ve created the PIM Tax – MSRRA State Selector Tool below. In just a minute or two, you’ll answer a few simple questions and see which state may be most beneficial for your tax filing purposes. This is an educational tool, not legal advice – but it’s a great starting point for a conversation about your unique situation.
Once you see your results, click Request a Consultation to talk with one of our military-focused tax experts. We’ll help you confirm your best option and ensure your tax filings are done right.
Your mission is to serve. Our mission is to get you the lowest legal tax bill!
Which state should we use for state income tax?
This quick checker uses current federal rules (MSRRA & subsequent amendments) to show which state option is likely most favorable for your situation.
This tool is an educational estimator and not legal or tax advice. Complex income (rental/Schedule C, non-wage, community property, credits, etc.) can change the answer. We’ll review details before filing.
How this tool decides
Disclaimer: This tool is provided for educational purposes only and is not legal or tax advice. Your personal circumstances, state-specific rules, and other factors may change the outcome. Always consult with a qualified tax professional before making state residency or filing decisions.
*The Military Spouse Residency Relief Act (MSRRA) is not a standalone law — it is actually a set of provisions within the broader Servicemembers Civil Relief Act (SCRA). The SCRA is a federal law that provides important legal and financial protections to active duty servicemembers and their families, covering everything from interest rate caps to lease terminations.
We use the term MSRRA to specifically refer to the SCRA’s rules about state residency and taxation of military spouses. These provisions were first added to the SCRA in 2009 and have been updated in later amendments.
Under MSRRA, when certain conditions are met, a military spouse can keep their state of legal residence for tax purposes, or claim the state of legal residency of the servicemember, or claim the state where they are currently living on military orders. This protection can prevent spouses from having to change residency every time the family relocates and, in some cases, can eliminate state income tax on their wages.
At PIM Tax Services, we focus on helping military families understand and apply MSRRA correctly so they pay only the state income taxes the law requires — and not a penny more.