To stop your host state from withholding income tax under the Military Spouses Residency Relief Act, you file a state withholding exemption certificate with your employer’s payroll office, list your elected state of legal residence, and attach the documents that prove you qualify. There is no single federal form. Each state issues its own version, and the state you write on it must be one you can legally claim under 50 U.S.C. § 4001.
Pick the State You Will Put on the Form
The 2018 Veterans Benefits and Transition Act expanded the original 2009 law and gave military couples three residency options. Under 50 U.S.C. § 4001(a)(3), you and the service member may each elect any of the following for tax purposes, regardless of when you married:{1Office of the Law Revision Counsel. 50 USC 4001 Residence for Tax Purposes
- The service member’s residence or domicile. This is the most common choice. If the service member claims Texas, you can claim Texas even if you never lived there.
- Your own residence or domicile, if you established legal residence in a different state before the move and want to keep it.
- The service member’s permanent duty station.
The election is made each taxable year, so you are not locked in permanently. The earlier version of MSRRA required both spouses to share a state; that restriction is gone.
One limit worth knowing before you write a state on the form: MSRRA does not let you pick any state you want. Either you or the service member must have a genuine connection to the chosen state, established through actions like voting, paying taxes, holding a license, or owning property there.{2Federal Voting Assistance Program. Voting Residence for Service Members and Their Family If your elected state has no individual income tax, your wages escape state income tax entirely; if it does have an income tax, you owe it there rather than in the host state.
State of Legal Residence Is Not Home of Record
Two labels get mixed up on withholding forms, and mixing them up leads to wrong paperwork. Home of record is a military administrative label, typically the state where the service member enlisted, used to calculate certain travel entitlements. It changes only in narrow circumstances such as a new enlistment contract.{3United States Army. State of Residence vs Home of Record What Does It All Mean
State of legal residence, sometimes called domicile, is the state where the service member intends to live permanently and maintains legal ties: voter registration, driver’s license, property, or similar connections. State of legal residence is what MSRRA uses. When you complete the withholding form, reference the state of legal residence, not the home of record, even if they happen to be the same state.
DD Form 2058, the State of Legal Residence Certificate, is what the service member files with finance to record their state of legal residence and adjust military pay withholding. Filing the form does not by itself change anyone’s domicile; it updates the pay system after domicile is established through concrete actions.{4United States Army. State of Legal Residence Home of Record Get a current copy from the service member before you sit down with your employer’s form.
Documents to Have in Hand
Missing even one of these items can delay payroll changes by several pay periods:
- Service member’s Leave and Earnings Statement (LES). Shows current state of legal residence and confirms active-duty status. Most employers and state revenue agencies accept this as primary proof.{5Cumberland County North Carolina. Military Spouses Residency Relief Act Form
- Your military dependent ID card, which confirms the spousal relationship.
- Marriage certificate. Some employers and states require this separately.
- DD Form 2058. The state on this form should match the state you claim, if you are electing the service member’s residence.{6U.S. Department of Defense. DD 2058 State of Legal Residence Certificate
- Military PCS orders. Employers frequently request these to confirm the service member is in the state on military duty, which is the legal trigger for your exemption.
Keep copies of everything you hand over. If the host state ever questions your exemption, these records are your proof.
Filling In the Form
Each state provides its own withholding exemption certificate, a state-tax counterpart to the federal W-4. Some have a dedicated military spouse form: Arizona uses Form WEC, Kentucky uses Form K-4, and Wisconsin uses Form W-221. Others add a military spouse checkbox or exemption line to their standard withholding certificate. Your employer’s payroll office or the host state’s department of revenue website will have the correct one.
Whichever form you use, expect to provide:
- Full name, Social Security number, and current physical address in the host state.
- The exemption claim itself. Mark the line, checkbox, or section indicating you are exempt from the host state’s income tax withholding. The form will typically ask for the legal basis; write or select the Military Spouses Residency Relief Act.
- Your elected state of legal residence. This must match DD Form 2058 if you are electing the service member’s state, or your own established domicile if you are electing yours.
Several states require you to attach a copy of the LES and your military ID directly to the form. Arizona, for example, explicitly requires the LES to accompany Form WEC and allows the employer to copy your military ID. Skip the attachments and the employer can reject the form or keep withholding.
Submit to Payroll, Not Your Manager
Hand the completed form and supporting documents to the payroll department, not your direct supervisor and not HR generally. Ask for written or emailed confirmation that the form was received and the date it was submitted. Payroll systems typically need one to two pay cycles to update, so your first paycheck after submission may still show state taxes withheld.
If the employer is unfamiliar with MSRRA, point them to 50 U.S.C. § 4001 and the host state’s revenue department guidance. The law is federal, and the employer has no discretion to override it. If payroll still refuses to stop withholding after you submit valid documentation, contact the host state’s department of revenue directly for written guidance to the employer. A military legal assistance office on the nearest installation handles these disputes regularly and can help.
Recovering Taxes Already Withheld
Taxes are often withheld from the first few paychecks at a new job before the exemption paperwork clears payroll. Those withholdings are recoverable. File a nonresident income tax return with the host state at the end of the year and claim a refund of the amounts withheld. Most states publish a specific nonresident or part-year resident return for this purpose.{7Kentucky Department of Revenue. Military Spouse Income Tax Relief
Report your income on the nonresident return but mark it as not taxable to the host state. Many states include a dedicated military spouse checkbox or code. In Kentucky, file Form 740-NP and check the Military Spouse box. In New York, file Form IT-203 and enter the applicable special condition code.{8New York State Department of Taxation and Finance. Information for Military Personnel and Veterans The host state then processes the refund like any other overpayment.
To avoid the same delay next time, submit your withholding exemption form to any new employer on your first day, before the first payroll run.
You Still Owe Tax to Your Elected State
Being exempt from host-state withholding does not mean the income goes untaxed. You still owe tax to the state you elected as your residence. If that state has an income tax, you generally file a resident return there and report the wages you earned in the host state. Some states let military couples file jointly on a single resident return. Only when your elected state has no individual income tax do your wages escape state taxation entirely, which is why many military families establish legal residence in states like Texas, Florida, or Nevada.
Records to Keep for at Least Four Years
A host state can question your exemption years after the fact if it audits your return or notices you filed as a nonresident while earning wages locally. Keep the following for at least four years after each tax year:
- A copy of every withholding exemption form you submitted to an employer, with the submission date noted.
- PCS orders covering each period you claimed the exemption.
- The service member’s LES from the same period, showing state of legal residence.
- A copy of DD Form 2058 reflecting the service member’s elected domicile.
- Any nonresident returns you filed to recover withheld taxes.
With these on hand, an audit letter is a paperwork exercise. Without them, you can end up owing back taxes, interest, and penalties even though the law was on your side.