Key Takeaways
- Military members can maintain Florida domicile regardless of duty station location
- SCRA protects military income from taxation by non-domicile states
- Military spouses get similar protections under MSRRA
- Florida's 0% income tax saves military families thousands annually
Why Military Families Choose Florida
Florida is the most popular state of legal residence for active duty military members, and for good reason:
- 0% state income tax: Military pay and spouse income are tax-free at the state level
- SCRA protection: Your Florida domicile is protected regardless of where you're stationed
- Military-friendly: Large veteran community, multiple bases, familiar with military needs
- No minimum presence: Maintain Florida residency while stationed anywhere
$3,000 - $10,000+
Typical annual savings for military families leaving high-tax states
Servicemembers Civil Relief Act (SCRA) Protections
The SCRA (50 U.S.C. §§ 3901-4043) provides powerful protections for military members:
Tax Protection
- Your military income can only be taxed by your state of legal residence (domicile)
- States where you're stationed cannot tax your military pay
- Florida domicile = $0 state income tax on military compensation
What's Protected
- Base pay
- Special pay and bonuses
- Allowances (BAH, BAS, etc. are already tax-exempt federally)
- Retirement pay (for those who retire as Florida residents)
Example: An E-7 stationed in California maintains Florida domicile. Despite living in CA with its 13.3% top rate, their military pay is only subject to Florida's 0% rate. California cannot tax their military income.
Military Spouse Residency Relief Act (MSRRA)
The MSRRA extends similar protections to military spouses:
Key Provisions
- Spouses can claim the same state of residence as the service member
- Spouse's income is taxed by the domicile state, not the duty station state
- Must be present in the duty station state solely due to military orders
Requirements
- Service member must be on active duty orders
- Spouse must be in the same state as service member due to those orders
- Both must have the same state of legal residence (Florida)
- Spouse must have established Florida domicile before or during assignment
Spouse Employment: Military spouses working in high-tax states like California can avoid that state's income tax if they maintain Florida domicile under MSRRA. This can save thousands annually.
Establishing Florida Domicile as Military
Step-by-Step Process
- Get a Florida address: Your Tax Base provides a residential address that works for military needs
- File Declaration of Domicile: Under Florida Statutes §222.17
- Get Florida driver's license: Can be done during leave or at Florida DMV offices on base
- Update your SRB/DEERS: Change your Home of Record (HOR) to Florida
- Register to vote: Florida voter registration
- Register vehicles: Florida plates (can keep on base even if stationed elsewhere)
Military-Specific Documentation
- DD Form 2058: State of Legal Residence Certificate (file with finance)
- LES update: Verify state tax withholding stops after changing SLR
- DEERS update: Change address in Defense Enrollment Eligibility Reporting System
Important: Changing your State of Legal Residence (SLR) is different from your Home of Record (HOR). HOR affects certain entitlements and typically stays the same. SLR is for tax purposes and can be changed to Florida.
Common Military Situations
Currently Stationed in High-Tax State
You can still establish Florida domicile while stationed in California, New York, etc.:
- Get a Florida residential address through Your Tax Base
- Complete Florida domicile documents during leave
- File DD Form 2058 to change your SLR
- Your military pay becomes exempt from the high-tax state
PCS to New Duty Station
When you PCS, your Florida domicile follows you:
- No need to change domicile when moving to new duty station
- Update your mailing/forwarding address with Your Tax Base
- SCRA continues to protect your income at new location
Deploying Overseas
Florida domicile is ideal for deployments:
- Mail forwarding keeps you connected
- No state income tax on deployment pay
- Combat zone exclusion combines with Florida's 0% for maximum savings
- Spouse at home continues to benefit from MSRRA
Transitioning to Civilian Life
When separating or retiring:
- Your Florida domicile remains even after leaving service
- Military retirement pay is not taxed by Florida
- Easy transition to civilian employment with established Florida residence
Veterans Benefits
Florida offers additional benefits for veterans:
- No state income tax: On any income, including retirement
- Property tax exemptions: For disabled veterans (must own FL property)
- Homestead exemption: Additional savings for Florida homeowners
- Vehicle registration discounts: For certain veterans
- Free state park admission: For disabled veterans
Common Mistakes to Avoid
- Not updating DD 2058: Finance will continue withholding for your old SLR
- Spouse not claiming MSRRA: Must actively claim protection with employer
- Using APO/FPO as domicile address: Use your Florida residential address
- Not keeping documentation: Save all domicile change records
- Waiting too long: Every month in a high-tax state costs money
Frequently Asked Questions
Can I change my domicile while deployed?
Yes, but it's easier to do during leave in Florida. Remote options (online notarization, mail-in forms) make it possible from anywhere.
What about National Guard and Reservists?
SCRA protections apply when on federal active duty orders. During drill weekends or state active duty, your domicile state still matters—another reason Florida's 0% rate helps.
Can my spouse work in any state tax-free?
Under MSRRA, your spouse's income is taxed by your shared domicile state (Florida = $0) rather than the duty station state, as long as they're there due to military orders.