Arkansas tax exemption for military spouses

  • Published
  • By Staff Sgt. Jeremy McGuffin
  • 19th Airlift Wing

U.S. Military members are afforded many benefits during their careers.  Free college, affordable healthcare, free services for family members, and tax breaks are a few such benefits.  While taxes may not be the first thing that jumps to mind, it is just one of the items spouses can take advantage of.

An important new tax benefit in Arkansas for active-duty military members and their spouses who are residents of other states is that they are not required to pay Arkansas state income tax. Unfortunately there may be military spouses being charged Arkansas state taxes because they have not filed the correct forms with the state of Arkansas.

In order for a spouse to be exempt from paying in-state income tax, they need to meet certain requirements, have the proper paperwork and the spouse must have the same domicile as the member as per the Military Spouses Residency Relief Act of 2009.

Filling out the correct forms and submitting the service members leave and earnings statement is the easy part; it’s meeting the third requirement that can be confusing.

“For example, if the military member is a resident of Florida, but the spouse is a resident of Georgia, when the couple move to Arkansas, the spouse loses his or her Georgia residency and becomes a resident of Arkansas,” said U.S. Air Force Capt. Alexander Zoll, 19th Airlift Wing Assistant Staff judge advocate. “As a result, the spouse would not be exempt from paying income tax to the state of Arkansas. On the other hand, if both the member and spouse are residents of Florida, the spouse will retain his or her Florida residency and will therefore be exempt from paying income tax to Arkansas.”

If eligible, each non-resident member should fill out the tax exemption certificate and send the form through mail or email along with a copy of their W-2 and current LES showing their state of residency as any state other than Arkansas. This only matters if the spouse has income of their own.

“The Military Spouse Residency Relief Act does not allow a spouse to pick or chose a domicile in any state,” said U.S. Air Force Capt. Robert Hines, 19th Airlift Wing Assistant Staff judge advocate. “The spouse must have actually been physically present in the state, established it as his or her domicile, and maintained it as such by forming and maintaining the necessary contacts.  These ‘necessary contacts’ may vary depending on the state, but registering to vote or registering a vehicle in the service member's state will often suffice.”

It’s important to utilize the benefits associated with the military, especially when it comes down to money.

"As military members, we are afforded many opportunities,” said Chief Master Sgt. Kenneth Carter, 19th Airlift Wing Command Chief. “Arkansas has recognized the hard work we do day in and day out and realizes that spouses also have a hard job moving around the globe to support the U.S. Air Force. It's important to understand the opportunities available to our spouses because they sacrifice so much to support our nation as well as our families and deserve to be recognized."

For more information contact the Arkansas Dept. of Finance at (501) 682-7692 or email: individual.income@dfa.arkansas.gov.  All forms can be found at http://www.dfa.arkansas.gov/offices/incomeTax/individual/Pages/forms.aspx