Shape Memory Alloy (SMA) composites are being increasingly investigated to address a variety of engineering problems. An application of growing interest is an SMA-MAX phase ceramic composite for use in extreme environments. By joining these two constituents, it is intended that the martensitic transformation of the SMA phase may be used with the unique kinking behavior of the MAX phases to improve the composite response. One particular intended outcome of this utilization is the development of residual stress states in the composite. These residual stress states are generated due to the formation of irrecoverable strains resulting from the interaction of the inelastic mechanisms in the system. By tailoring this stress state, the improved mechanical response of the ceramic phase under compression may be taken advantage of. These residual stress states and their effect on the effective thermomechanical response of the composite are explored in this work. To this end, a finite element model of the composite is development. Specifically, a recent 3D phenomenological constitutive model of the SMA phase is incorporated to describe the effects of martensitic transformation and a constitutive assumption for the MAX phase response associated with kink band formation is introduced. An additional non-transforming NiTi phase is noted and the role of its constitutive response is considered. This model is used to study the micromechanics of the associated composite residual stress states. The influence of these residual stresses on the effective actuation response is then investigated and the on the associated composite behavior determined. Specifically, it is shown that the variation in inactive NiTi leads to an altered actuation response.