Wills, Trusts & Estates: Plain and Simple – Changing Your “Home” For State Tax Purposes – Not So Easy

March 15, 2019

It’s March, the winter has dragged on, and many of us are longing for warmer weather.  Some with second homes in Florida or Arizona and the like start thinking about changing their primary residence for state income and estate tax purposes.  Despite “cocktail party talk,” changing your residence for tax purposes is not so easy; and, if you do desire to do so, you must become familiar with, and adhere to, the residency and domicile rules.

While New York imposes state income tax on a New York resident’s worldwide income, as well as state estate tax on taxable estates exceeding $5,740,000 in 2019, Florida, for example, imposes no state income or estate tax upon its residents.  A taxpayer is a New York resident if she is domiciled in New York, or if she is a “statutory resident”, which means spending 183 days or more per year in New York State and maintaining a permanent place of abode in New York State.  Even if the taxpayer spent more than 183 days in Florida for that year, she still may have too many connections with New York that will lead to a determination that she has not changed her residency and is still a New York resident for New York tax purposes.  In order to successfully change one’s residence for tax purposes, many ties with one’s former home state must be loosened or broken; and the import-ant elements of one’s life must be centered in the new state.

Reprinted with permission from Lloyd Harbor Life, March 2019. 

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