Tax News

CCH (cch.taxgroup.com) reports:

  The Kentucky Department of Revenue offers personal income tax filing guidance to military spouses who fall under the federal Military Residency Relief Act of 2009 (P.L. 111-97), legislation signed by President Barack Obama on November 11, 2009. The Act is effective beginning with taxable year 2009 and prohibits a servicemember's spouse from 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 both the servicemember and the spouse. The Act also prohibits a spouse's income from being deemed income earned in a tax jurisdiction if the spouse is not a resident or domiciliary of the jurisdiction when the spouse is in the jurisdiction solely to be with a servicemember serving under military orders.

  For 2009, military spouses to whom the Act applies should file Form 740-NP (Kentucky Individual Income Tax Nonresident or Part-Year Resident Return) to obtain a refund of Kentucky income tax withheld from their 2009 pay. The income should not be reported as taxable on the Kentucky income tax return, and "MILITARY SPOUSE" should be written across the top of the return. For 2010, military spouses should file the newly updated Form K-4 (Employee's Withholding Exemption Certificate) with their employer to claim the exemption from withholding of Kentucky income tax. The updated form is available at
http://revenue.ky.gov/forms/curwhfrms.htm. Taxpayer assistance is available at (502) 564-4581.

Hot Topics , Kentucky Department of Revenue, December 11, 2009