Section 302 of the Veterans Benefits and Transition Act of 2018 ("VBTA") allows the spouse of an active duty servicemember the option to file state and local taxes as a resident of the servicemember's state of legal residence, even if they have no other connection with that state. See page 3 of this reference:
https://www.jag.navy.mil/legal_services/documents/Info_Paper_2018_SCRA_Amendments.pdf
Therefore, you and your wife may both file as residents of Iowa. She would then have no obligation to file a DC tax return.
If she chooses to do this, in the My Info section of TT, enter Iowa as the State of Residence for both of you.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
