I knew that if you were in the military you could claim and maintain residency in a state irrespective of where your orders sent you. However, I had just assumed that this benefit was also available to their spouses. Therefore, I was surprised to hear that this benefit was recently enacted for military spouses. The Military Spouses Residency Relief Act (MSRRA) allows military spouses to maintain their residency in their home state despite where their spouse’s orders take them. This is a great benefit to military couples because it will enables flexibility. However, before you make your decision, according to Military.com here are some factors you should consider:
- Where do you want to vote?
- Where do you want to register your car(s)?
- Where will you file state income taxes or will you file them at all (several states have no state income tax)?
- Will your residency choice affect tuition rates at a college or university?
- Check the impacts on county and local taxes, fees and services.
- Is your state of residency a community property state?
- How will your state of residency affect your insurance rates – home, auto, business?
- Ensure your will, Power of Attorney, and other estate planning will be valid in your state of residency.
- Are there any college savings plans tax breaks in one state versus another?
- How will a different residency affect you if you own or operate your own business?
- Will property rights change if you opt for residency in one state versus another?
- How will personal property taxes be affected if you change your state of residency?
These are some great questions to ask yourself before you decide what is best for you and your spouse. The answers to these questions will directly impact your taxes, fees, car registration and communal property. Therefore, definitely take the time to assess the impacts before you move.