ARNOLD AIR FORCE BASE, Tennessee –
The Servicemember Civil Relief Act has been updated to increase the protections offered to servicemembers and their dependents.
It was enacted in 2003 but was amended as part of the Veterans Auto and Education Improvement Act of 2022. The SCRA is a shield for those whose financial affairs may be negatively impacted by their service. The act covers contract and consumer transactions, civil legal proceedings and taxation matters. The new amendments change three significant provisions in the statute that concern contract termination, taxes and professional licenses.
Beginning in January 2023, the contract termination provision in the SCRA now includes gym memberships, fitness programs and home security services. Previously, this section only included cell phone service, internet access and cable television as covered contracts.
Further, these contract termination protections now extend to dependents who accompany servicemembers during their relocation. Prior to 2023, dependents could not claim SCRA protection on these contracts unless the member was a cosigner or account holder.
The SCRA now allows members and their spouses wider freedom to elect a domicile for tax purposes.
Before 2023, members were protected from state income tax based solely on their duty station, but they were also limited in their ability to change their residence as they wished. Now, a member may choose between the servicemember’s residence, spouse’s residence or their permanent duty station as their domicile for tax purposes giving greater flexibility to the individual member and their family.
The 2023 amendments also added a new section which allows members and their spouses with active professional licenses to transfer those licenses to their new jurisdiction.
The license seeker is entitled to a transferred license if they provide a copy of their military orders to the licensing authority in the new jurisdiction, are in good standing in the old jurisdiction and have actively used the license in the last two years. The individual must follow the new jurisdiction’s standards and continuing education requirements, and the license sought must be of the same nature and scope. The only explicit exception is for licenses to practice law, which are still not transferable.