If we are stationed in Virginia on active duty, and my wife works in the state of Virginia, but our home of residence for tax purposes is TN, does she file VA state tax?

Nonmilitary spouses can use their military spouse's resident state when filing their taxes. The Military Spouse Residency Relief Act (MSRRA) allows a nonmilitary spouse of a service member to keep the same resident state of the military spouse regardless of which state they live in.

Your spouse will need to check with the Virginia state website to see how to request that Virginia income tax not be withheld from their wages. Since they will be paying Georgia taxes on their wages, they need to have Georgia income tax withheld from their paycheck. If they do end up with Virginia withholding, they will have to file a Virginia tax return to get it back.

See TurboTax Help here.

Military Spouses Residency Relief Act in Virginia FAQ's answers questions and provides forms to complete to have the proper state taxes withheld.