TAXES 17-29, Military Spouse Residency Relief Act
Published: October 4, 2017
Effective: Pay Period 12, 2010
The Military Spouses Residency Relief Act (MSRRA) (Public Law 111-97) was signed into law on November 11, 2009. MSRRA allows spouses of military personnel to withhold State and local taxes based on an address other than their duty station or residence address documented in the Payroll/Personnel System (PPS).
This bulletin can be accessed on the National Finance Center (NFC) Home page under Tax Information. Refer to the Resources section below for location.
To meet the requirements for MSRRA, NFC has a process to allow spouses to withhold State taxes based on an address other than their duty station or residence address documented in PPS.
Special Employment Programs Code MS (Military Spouse Special Tax Processing) identifies employees who meet the entitlement of MSRRA. Special Employment Programs Codeallows NFC to accept a State tax document for any State even if it is not the employee's duty station or residence address as documented in PPS.
Processing Procedures for MSRRA
Employing Agencies must apply the following steps prior to the processing of a new State tax document for an address other than the employee’s duty station or residence address currently documented in PPS:
- Process the appropriate personnel action as indicated below.
- Current Employee − Process an Update Action (Nature of Action Code (NOAC) 006, Update) to the last NOAC to update the Special Employment Programs Code field on the employee’s personnel database record with .
- New Hires and Reassignments − Process the accession personnel actions for new hires and reassignments and include in the Special Employment Programs Code field.
- Confirm if an employee has a current State tax record on the database by accessing the Information/Research Inquiry System (IRIS) Program IR105, State Tax.
- Submit a cancelation State tax document to cancel the current State tax record on the database if it is not the State for which the employee wants State taxes withheld. The current State code must also be entered. Based on the entry system used by your Agency, the following must be applied to cancel a State tax document:
- is entered in the Total Number of Allowances field in the Web-based Entry Processing Inquiry and Correction System (EPICWeb).
- is entered in the Total Number of Allowances field in EmpowHR.
- is transmitted in the State Tax Number of Exemptions data element in the Front-End System Interface (FESI), State Income Tax Certification (140) record layout.
- Confirm the NOAC 006 has applied Special Employment Programs Code to the employee’s personnel database record on IRIS Program IR102, Dates & Misc Sal/Pers Data. Special Employment Programs Code is what will allow employees to have taxes withheld for a State other than their duty station or residence State in the PPS.
- Confirm the current State tax record has been canceled, if applicable.
Once steps 1 through 5 have been completed or confirmed, employing Agencies may process the new State tax document.
History Correction Update
If an employing Agency changes personnel history data through a history correction update afterhas been applied, the history correction update will cause the action to be removed from the employee’s personnel database record. Therefore, the employing Agency must again update the Special Employment Programs Code with .
Recalculation of New State Tax Rate
If an employee has already had State taxes withheld based on a residence address or duty station prior to acceptance of the new State tax document, the employing Agency can submit a request through the Web-based Special Payroll Processing System to have the previously withheld taxes recalculated at the new State tax rate and transferred, or if applicable, request a refund of an overpayment.
To locate the Military Spouse Residency Relief Act bulletin, go to thepage from the drop-down menu on the NFC homepage. Select the tab. Select from the menu to view the desired bulletin.
For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center ator via the ServiceNow Customer Service Portal (CSP).