What’s the “Military Spouse Residency Relief Act” Mean to You?
Nov 18 2009
A flurry of action lately on laws passed that benefit military members.
• Homeowners’ Assistance Program payments were made tax-free.
• The First-Time Home Buyers Credit extended for military members out to May 2011 if you had at least 90 days overseas service starting 1 Jan 09 to before 1 May 2010. Plus, the waiver of the 3-year occupancy requirement. Now military members who are PCS’d prior to living in the new home for 3 years do not have to pay back the tax credit.
• Passage of the Military Spouse Residency Relief Act (MSRRA).
So what’s the MSRRA mean to you? Now, your non-military spouse is allowed to determine where his/her state of legal residence will be—your current state of assignment or the state of legal residence of the military member. You need to decide soon because your decision will affect your 2009 tax year. It is not retroactive to years prior to 2009.
What should you consider?
• Where you want to vote.
• Where your cars will be registered.
• Where you want to file state income taxes or whether you will have to file state income taxes.
• Cancelling your state income tax withholding from a paycheck in an income tax state if you switch to a non-income tax state.
• Check for the impact on in-state tuition situations.
• Check the impacts on county and local taxes, fees and services.
• Community property state or not.
• Insurance issues; possibly auto, life and commercial health plans.
• Wills, Powers of Attorney, estate planning issues.
• College savings plans tax breaks.
• Business related issues if you own and operate your own business.
• Property rights.
• Personal property taxes.
There are many details to be determined and implemented by the states as they digest this new law. If you want to join the social network discussing this new law, check out the Facebook page.
We need to research!