New legislation impacts spouses of United States military service members. A military spouse who works in the local economy may be liable for host nation taxes or other payments associated with being hired in another country. Updates to the MSRRA clarify confusion between domicile and resident statuses for military spouses. The decision on how to treat your foreign spouse for income tax purposes is a critical part of Tax Planning. The MSRRA amends the Servicemember Civil Relief Act (SCRA) to include the same privileges to a military servicemember’s spouse.. The challenges faced by military spouses in maintaining career continuity on overseas assignments is partly due to limitations built into host-nation agreements and U.S. tax laws, according to a new report by the National Military Spouse Network. Military Spouses Residency Relief Act FAQs Military Spouses Residency Relief Act FAQs . The Military Spouses Residency Relief Act amends the Servicemember Civil Relief Act to include the same privileges to a military servicemember’s spouse. Tax Law Issues When Working Overseas. These are important points to consider: If you intend to have your foreign spouse apply for a green card and eventually for the U.S. citizenship, it is in your best interest to … You are taxed on your worldwide income, even though you live and work abroad. The Military Spouse Residency Relief Act (MSRRA) provides protection to military spouses related to residency, voting, and taxes. However, this number does not account for the difficulties military spouses encounter when stationed overseas. On December 31, 2018, Congress passed the Veterans Benefits and Transition Act of 2018 that may impact how you file your Virginia income tax return for 2018. Your worldwide income is subject to U.S. income tax, regardless of where you reside, and there are specific filing requirements and tax rules for claiming deductions, credits and other taxes. If you are a U.S. citizen or U.S. resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad.

Military spouse employment is significantly impacted by Status of Forces Agreements and complicated tax laws. United States tax laws will also apply, it is a very good idea to contact a tax professional before you accept money for working in another country. Read our Feb. 25 Tax Bulletin 19-2 for more details. If you are a U. S. citizen working for the US Government, including the Foreign Service, and you are stationed abroad, your income tax filing requirements are generally the same as those for citizens and residents living in the United States. Military spouse unemployment rates hover around 24%.