Tax News

CCH (cch.taxgroup.com) reports:

  The Military Spouses Residency Relief Act (MSRRA) (Public Law 111-97) was signed into law on November 11, 2009 and may affect the California income tax filing requirements for spouses of military personnel. This new law is effective for taxable year 2009. The MSRRA allows the same residency benefits permitted to military personnel under the Servicemembers Civil Relief Act (SCRA) to also apply to a military spouses non-military service income, under certain circumstances.

  The Franchise Tax Board (FT is currently updating its Publication 1032 (Tax Information for Military Personnel) with guidelines on the impacts of the MSRRA. The revised Pub. 1032 is expected before the end of 2009.

  CCH Note: The MSRRA prohibits a servicemember's spouse from either losing or acquiring a residence or domicile for purposes of taxation because he or she is absent or present in any U.S. tax jurisdiction solely to be with the servicemember in compliance with the servicemember's military orders, if the residence or domicile is the same for the servicemember and the spouse. P.L. 111-97 also prohibits a spouse's income from being considered income earned in a tax jurisdiction if the spouse is not a resident or domiciliary of such jurisdiction when the spouse is in that jurisdiction solely to be with a servicemember serving under military orders.

Announcement , California Franchise Tax Board, November 19, 2009