Military Spouses Residency Relief Act – Paid

What is the Military Spouses Residency Relief Act?

The Military Spouses Residency Relief Act is a federal/state law that allows military spouses to declare the same state of legal residency as their spouse. Impacted employees are to be taxed for state withholding purposes as if they live and work in their military state of residency.

For detailed information about MSRRA, refer to this IRS resource.

How do tax withholdings work under MSRRA?

The employee will be treated as if they live and work in their military state of residency.
We will calculate, withhold, and report state withholdings using the military state of residency, based on the worker's W-4 information for that state.
The employer should register for state withholding in the military state of residency if that state supports income tax.

Please note that MSRRA does not apply to the following taxes:

Unemployment taxes
Disability taxes
Payroll Expense Taxes
Transit taxes
FLI
Workers Compensation
Head taxes

What action is required by the Employer and Worker?

Ensure that the worker has provided the employer with their DD 2058 form
Ensure the worker has completed their state tax withholding elections and selected the filing status of Nonresident military spouse within their worker profile > tax info card.