Military Spouses Residency Relief Act

The Military Spouses Residency Relief Act (MSRRA) provides an income tax exemption for the servicemember’s spouse when:

• The servicemember is in California on military orders.
• Is legally married to the spouse.
• The spouse accompanied the servicemember to California on military orders.

If you are the spouse of a military servicemember and wish to claim the exemption, you must fill out the Employee’s Withholding Allowance Certificate (DE 4) (PDF) and submit it to your employer.

For additional information or questions about your specific California income tax return filings and PIT withholding refund requests, contact the Franchise Tax Board at 1-800-852-5711.

Employer Reporting Requirements

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. The spouse can exempt wages that are subject to California PIT by filing the Employee’s Withholding Allowance Certificate (DE 4) (PDF). Once submitted, the employer does not need to report PIT wages or withholding.

If an employee changes their withholdings and chooses the exemption, then the employer must comply with that choice going forward. Employers are not required to refund any monies withheld under the previous Employee’s Withholding Certificate (DE 4) (PDF). The employee must claim the refund on their state income tax return.