Military Spouses Residency Relief Act FAQs
Find answers to frequently asked questions about the Military Spouses Residency Relief Act.
The Military Spouses Residency Relief Act (MSRRA) is an update to the Servicemember Civil Relief Act which extends the same residency privileges to a military servicemember’s spouse. This Act allows a servicemember’s spouse to keep a legal residence throughout the marriage, even if the spouse accompanies the servicemember to California on military orders.
This Act also provides an income tax exemption for the servicemember’s spouse. For example, they can file a tax exemption when they earn wages in California under the following conditions:
- The servicemember is in California on military orders.
- Is legally married to the spouse.
- The spouse is in California specifically to live with the servicemember.
Does the servicemember spouse need to file a new Employee’s Withholding Allowance Certificate (DE 4) for the income tax exemption?
Yes, the DE 4 includes this income tax exemption and is available online for employers and servicemember spouses.
Does the employer or servicemember spouse need to provide proof to declare another legal residence other than California?
Yes, the Employee’s Withholding Allowance Certificate (DE 4) provides a specific line and signature for the servicemember spouse to state under penalty of perjury, that they are requesting an income tax exemption from the State of California. This statement will satisfy the proof requirement. However, records may be requested from the employer or employee to confirm the tax exemption if an audit is performed. These records include, but are not limited to:
- Spouse’s military ID card
- Servicemember’s Leave and Earnings Statement (LES)
- Servicemember’s Form W-2
- Spouse’s driver license
- Spouse’s voting registration
- Department of Defense - State of Legal Residence Certificate, Form DD 2058, declaration of servicemember’s permanent state of residency
- Marriage license
- Divorce decree
The servicemember spouse’s wages are subject to California Unemployment Insurance (UI) and State Disability Insurance (SDI) taxes since the spouse earned wages in California. However, if the spouse decides to exempt wages that are subject to California Personal Income Tax (PIT) by filing the new Employee’s Withholding Allowance Certificate (DE 4) form, no PIT wages or withholding need to be reported by the employer.
When filling out the forms:
Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)
- Enter Total Subject Wages.
- Enter zero for PIT Wages.
- Enter zero for PIT Withheld.
Quarterly Contribution Return and Report of Wages (DE 9)
- Include the servicemember spouse’s subject wages in the Total Subject Wages Paid this Quarter.
- Include the servicemember spouse’s subject UI wages in the UI Taxable Wages for the Quarter.
- Include the servicemember spouse’s subject SDI wages in the SDI Taxable Wages for the Quarter.
As an employer, am I required to refund an employee, if an employee changes their withholdings and chooses the exemption after I submitted California PIT withholdings?
No. An employer is obligated to make withholding based upon the Form W-4 or Employee’s Withholding Allowance Certificate (DE 4). If an employee changes their withholding form and chooses the exemption, then the employer must comply with that choice going forward.
An employer would not be required to refund any monies properly withheld under the previous Form W-4 or DE 4. The employee must claim the refund on their state tax return.
As a military spouse, who do I contact about my personal income tax return filings or a PIT withholding refund request?
Questions about your specific personal income tax return filings and PIT withholding refund requests should be directed to the Franchise Tax Board at 1-800-852-5711.
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