How can I exempt a military spouse from state income tax?

To mark an employee as exempt from state income tax (SIT) due to a military spouse situation:

  1. If you have a presence in the new work state:

    1. Update the appropriate assignment location with a location in the worker's new work state.

    2. Open the employee's Tax Withholding card for editing.

    3. In the state regional component, set the employee as an exempt military spouse.

  2. If you don't have a presence in that state:

    1. Use the Locations task to define a location in the state.

    2. Create a Work Tax Address override for the assignment. It must represent an address in the employee's original state of residence.

  3. Create a Mailing Address for any correspondence while the employee is in the new state.

    Don't change their Home Address to reflect the state of residence.