MILITARY SPOUSES NOW HAVE CHOICE OF RESIDENCY FOR TAX PURPOSES:
The Veterans Auto and Education Improvement Act of 2022, passed on January 5, 2023, brings updates to domicile laws. Previously, the spouse of a military taxpayer could use the military taxpayer’s domicile for tax purposes. Now, the spouse can use either their state of residence, the military taxpayer’s state of residence or the permanent duty station of the taxpayer.
How can this benefit your clients?
When determining domicile, which impacts state taxes, a spouse of a service member can choose which state to claim as their domicile assuming it is either the state they call home, the state the service member’s residence or the state of the service member’s permanent duty station.
SEC. 18. RESIDENCE FOR TAX PURPOSES.
Section 511(a) of the Servicemembers Civil Relief Act (50 U.S.C. 4001(a)) is amended by striking paragraph (2) and inserting the following:
“(2) SPOUSES.—A spouse of a servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the spouse by reason of being absent or present in any tax jurisdiction of the United States solely to be with the servicemember in compliance with the servicemember's military orders.
“(3) ELECTION.—For any taxable year of the marriage, a servicemember and the spouse of such servicemember may elect to use for purposes of taxation, regardless of the date on which the marriage of the servicemember and the spouse occurred, any of the following:
“(A) The residence or domicile of the servicemember.
“(B) The residence or domicile of the spouse.
“(C) The permanent duty station of the servicemember.”.
SEC. 19. PORTABILITY OF PROFESSIONAL LICENSES OF MEMBERS OF THE UNIFORMED SERVICES AND THEIR SPOUSES.
- In General.—Title VII of the Servicemembers Civil Relief Act (50 U.S.C. 4021 et seq.) is amended by inserting after section 705 (50 U.S.C. 4025) the following new section:
SEC. 705A.PORTABILITY OF PROFESSIONAL LICENSES OF SERVICEMEMBERS AND THEIR SPOUSES.
“(a) In General.—In any case in which a servicemember or the spouse of a servicemember has a covered license and such servicemember or spouse relocates his or her residency because of military orders for military service to a location that is not in the jurisdiction of the licensing authority that issued the covered license, such covered license shall be considered valid at a similar scope of practice and in the discipline applied for in the jurisdiction of such new residency for the duration of such military orders if such servicemember or spouse—
“(1) provides a copy of such military orders to the licensing authority in the jurisdiction in which the new residency is located;
“(2) remains in good standing with—
“(A) the licensing authority that issued the covered license; and
“(B) every other licensing authority that has issued to the servicemember or the spouse of a servicemember a license valid at a similar scope of practice and in the discipline applied in the jurisdiction of such licensing authority;
“(3) submits to the authority of the licensing authority in the new jurisdiction for the purposes of standards of practice, discipline, and fulfillment of any continuing education requirements.
“(b) Interstate Licensure Compacts.—If a servicemember or spouse of a servicemember is licensed and able to operate in multiple jurisdictions through an interstate licensure compact, with respect to services provided in the jurisdiction of the interstate licensure compact by a licensee covered by such compact, the servicemember or spouse of a servicemember shall be subject to the requirements of the compact or the applicable provisions of law of the applicable State and not this section.
“(c) Covered License Defined.—In this section, the term ‘covered license’ means a professional license or certificate—
“(1) that is in good standing with the licensing authority that issued such professional license or certificate;
“(2) that the servicemember or spouse of a servicemember has actively used during the two years immediately preceding the relocation described in subsection (a); and
“(3) that is not a license to practice law.”.