"For any taxable year of the marriage, the spouse of a servicemember may elect to use the same residence for purposes of taxation as the servicemember regardless of the date on which the marriage of the spouse and the servicemember occurred.”
The summary
of the bill provides: “Sec. 302. Residence of spouses for servicemembers
for tax purposes: This provision would amend SCRA to allow the spouse of a
servicemember to elect to use the same state of residence as the servicemember
for state or local tax purposes regardless of when or where the two individuals
were married. These changes would apply with respect to any return of state or
local income tax filed for any taxable year beginning with the taxable year
that includes enactment.”
This change is effective for any state or local income tax returns filed
for the tax year that includes enactment date. So it applies starting with 2018 tax returns.The California Franchise Tax Board didn't miss the tax provision of the Act. FTB Pub 1032 for 2018 (2018 Tax Information for Military Personnel) states:
“This change also applies to
California. Income of a servicemember spouse for services performed in
California is not subject to tax if the spouse elects to use the same residence
as the servicemember who is a nonresident of California. If the spouse makes
the election, write “VBTA” at the top of the tax return in RED INK, or include
it according to the software’s instructions.”
It is also explained in the FTB’s 2018
conformity report.
If you or a client is married with one spouse serving in the military, see if this provision is relevant and if so, how your states of residence treat this, so income is reported in the most tax favorable state, and the state that might be expecting reporting knows that an election was made.
Seems like a fair provision given what is asked of members of the military and their families and the reality of multiple and frequent moves.
What do you think?
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