Reporting Military pay and residency

[Susan Swann]

I have a client who is in the military, a resident of Wisconsin, and stationed in CA.  In 2022, he married a girl that is a CA resident.  She has no earned income, and her children are getting Medical benefits from CA.  I think they plan to stay in CA once his service is complete, but this is still undetermined.  Would the correct filing be federal and WI with WI being their primary domicile?  Or should we file Federal and both states keeping WI their domicile?  Or lastly, since she is a resident, are they both now considered CA residents? 

[BobKamman]

He is still a Wisconsin resident and she is still a California resident.  But since they are both residents of community-property states, good luck.  

[Susan Swann]

Upon marrying, I would assume I would file a return with the address of the Taxpayer that has income, being WI.  They would lose their ability to file credits if they filed separately.    Also, I would assume that now that they are married, and she is without income, she is his dependent per se .  I hope someone else can provide a little insight based on experience. 

[rbynaker]

The rules changed recently.  The new answer to the residency question is "what do you want it to be?"

See the Veterans Auto and Education Improvement Act of 2022, Sec 18.

https://www.congress.gov/117/plaws/publ333/PLAW-117publ333.pdf

(3) ELECTION.—For any taxable year of the marriage, a
servicemember and the spouse of such servicemember may
elect to use for purposes of taxation, regardless of the date
on which the marriage of the servicemember and the spouse
occurred, any of the following:
(A) The residence or domicile of the servicemember.
(B) The residence or domicile of the spouse.
(C) The permanent duty station of the servicemember.

[Susan Swann]

Thank you So much!