This week’s question comes from Tim, a Director of Payroll. One of our employees is the spouse of a military member. She is claiming exemption from state withholding for 2009. How do we treat employees who claim exemption under the Military Spouses Residency Relief Act (the Act)? Answer: President Barack Obama signed the Act (Public Law 111-97) into law in November. Under the Act, spouses of military personnel who are present in or absent from a domicile due to compliance with military orders will not have their tax residence impacted by such presence or absence. The Act generally affects tax years 2009 and beyond. Affected employees should file an amended withholding form with their employers to claim exemption from withholding. Employers must not withhold taxes on employees who claim exemption under the Act. For 2009 tax years, affected employees should receive a refund of any tax withheld by filing a non-resident tax return in that state. Contact Vision Payroll if you have any questions on the Military Spouses Residency Relief Act.