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Especially if your military household moved to a new state in 2025, as a military spouse, keep in mind that you’ve received new rights in recent years in terms of where to pay your state income taxes – or not pay, if the state has no income tax.
In 2023, military spouses gained options for filing their state income taxes under the Servicemembers Civil Relief Act that now eclipse even those of active-duty members, because “In a weird quirk of the law, service members can use SCRA protections only for their military pay,” Military.com’s financial columnist Kate Horrell wrote in last year’s Tax Week series. Spouses, on the other hand, may rely on the protections for other types of income.
Read More: State Tax Filing Options for Military Households: What You Need to Know
As you get ready to file your 2025 taxes, here are some of the basics for military spouses to keep in mind:
States Where Military Spouses May Choose to File Taxes
The SCRA says service members and military spouses may file state taxes in any one of the following:
- The service member’s state of legal residence.
- The military spouse’s state of legal residence.
- The state where the household lives under PCS orders.
The Office of Financial Readiness describes “legal residence, or domicile” in part as follows: “In general, this is where you vote, register vehicles, or pay taxes. Most often, this is where you claimed legal residence before military service.”
Read More: State of Legal Residence vs. Home of Record
Depending on their situation, the service member and spouse don’t have to choose the same state to file their taxes.
Exceptions for Certain Income and Living Situations
Certain circumstances limit a spouse’s options:
- Rental income is one example of a form of income not covered under the SCRA for which taxes must be paid in the state where the rental property is located.
- Taxes on certain business income may have to be paid in the state where it’s earned. Military OneSource advises consulting a local tax professional.
- Spouses who don’t live in the same place as the service member due to orders must follow the local residency and tax rules where they live.
This fact sheet from the Office of Financial Readiness describes the sequence in which the government amended laws to add new filing options for spouses.
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15 Comments
The Office of Financial Readiness’s description of ‘legal residence, or domicile’ as where you vote, register vehicles, or pay taxes is helpful in understanding how to determine our state of legal residence for tax purposes.
As a military spouse who has moved to a new state in 2025, I appreciate the reminder that I have new rights in terms of where to pay my state income taxes, and I will definitely be looking into the specifics of the SCRA to ensure I’m taking advantage of the protections available to me.
It’s good to know that Military OneSource advises consulting a local tax professional for guidance on taxes on certain business income, as this can be a complex area of tax law and requires specialized knowledge.
The fact that the service member and spouse don’t have to choose the same state to file their taxes is a valuable flexibility that can help simplify our tax situation and reduce our tax burden.
The article’s mention of the 2023 expansion of the Servicemembers Civil Relief Act to give military spouses more options for filing their state income taxes is a welcome development, and I’m excited to learn more about how this will impact our financial situation.
This change has the potential to make a significant difference for military families, and it’s essential to stay informed about the details and any future updates to the law.
It’s interesting to note that military spouses may rely on SCRA protections for other types of income, whereas active-duty members can only use these protections for their military pay, which highlights the importance of understanding the specifics of the law.
This is a crucial distinction that can affect how spouses plan their finances and make decisions about their income and investments.
As a military spouse, I appreciate the reminder to understand the sequence of law amendments that have added new filing options for spouses, and I will be sure to review the fact sheet from the Office of Financial Readiness to ensure I’m taking advantage of all the available protections.
I’m skeptical about how the SCRA protections will be implemented in practice, and I hope that the government will provide clear guidance and support to military spouses who are navigating the tax system.
I’m curious about how the sequence of law amendments has added new filing options for spouses, as described in the fact sheet from the Office of Financial Readiness, and how this will impact our tax situation in the long run.
The fact that rental income is not covered under the SCRA and taxes must be paid in the state where the rental property is located is something that military spouses like myself need to keep in mind when filing our taxes, to avoid any potential penalties or fines.
I’m a military spouse and I’m glad to know that under the Servicemembers Civil Relief Act, I have options for filing my state income taxes, including the ability to file in the state where my household lives under PCS orders, which could simplify our tax situation.
Yes, it’s great that the law now allows spouses to take advantage of these protections, even for non-military income, which can make a big difference for those with multiple sources of income.
I’m concerned about the potential complexity of navigating different state tax laws, especially for spouses who don’t live in the same place as their service member due to orders, and I hope that consulting a local tax professional can provide the necessary guidance.