According to Military One Source as of Nov 2021: She can keep her state of legal residence and one pays taxes on income in their states... which would mean she doesn't pay Alabama taxes because she is resident of the state of Washington.
What am I missing from the info below? Also, the state of Alabama has refunded the state taxes under the MSRRA for the past two years.
Maintaining your legal residence under MSRRA
Every person has a state of legal residence. For most civilians, their state of legal residence is the place where they live. But service members and their families move frequently. The SCRA allows active-duty military members to maintain their legal residence in the place they consider home.
The Military Spouses Residency Relief Act allows military spouses to declare the same state of legal residency as their spouse. The Veterans Benefits and Transition Act allows spouses to make that choice regardless of when they were married. The following conditions must be met to qualify under the MSRRA:
- The service member is living on military orders in a state that is not his/her resident state.
- The spouse is in that state solely to live with the service member.
- Both the service member and spouse have the same resident state.
The spouse only pays taxes on income in their state of legal residency when they meet the above conditions.
