What factors should New Yorkers consider when planning to change their tax residence?

Our Private Client Products and services team has seen much more consumers than ever right before alter or plan  to modify their state of tax residence from the tristate area to lower-revenue-tax or no-income-tax states. We obtain that a lot of taxpayers suppose that shifting their “tax home” is as straightforward as expending considerably less than six months in their present state or switching their driver’s license.

The fact is this: Tax residency is intricate and consists of a variety of principles and elements that tax auditors use to claim previous citizens never ever changed their tax property. New York, in unique, is regarded for aggressively pursuing tax residency audits.

1st, it is vital to realize the definitions and aspects of tax residency so that citizens can adequately prepare their relocation. New York’s Nonresident Audit Pointers determine a tax resident as 1 who is domiciled in New York condition, or one particular who is not domiciled in New York condition but who maintains a long-lasting area of abode in the point out for substantially all of the taxable yr and spends additional than 183 times of the taxable 12 months in the point out. This sort of a man or woman is referred to as a statutory resident.

Domicile is defined in the guidelines as the place that an particular person intends to be his or her everlasting home— the location that the person intends to return to anytime the specific may possibly be absent. When pinpointing a taxpayer’s domicile, New York seems to be at main things 1st and “other factors” upcoming. Primary factors incorporate the home’s place, the individual’s lively enterprise involvement, the individual’s time spent in the condition, the place things “near and dear” to the coronary heart are kept, and household connections. Other things consist of, in section, the state issuing a driver’s license and the locale of vehicles, exactly where the taxpayer is registered to vote, and the deal with utilised for financial institution statements and payments.

Pertaining to New York statutory residency: In advance of tax calendar year 2022, “substantially all of the year” frequently intended a period exceeding 11 months. Beginning with tax 12 months 2022, this has changed to exceeding 10 months. This is a compact change that could have major affect on taxpayers relying on this nuance to stay away from remaining a New York statutory resident.

When preparing to change the tax domicile, it is crucial to know that it is dependent on information and conditions, so acquiring as many primary and other factors as probable in favor of the new tax household is critical. Maintaining contemporaneous documentation is equally crucial. Monitoring and documenting wherever an individual is investing days as they manifest is a great deal much easier than striving to re-build the calendar with substantiation up to a few several years down the street.

Documenting way of living changes that assistance “leaving and landing” in the new tax household is essential. For illustration, advertising or renting out a New York home and acquiring a property in yet another condition is a major issue in favor of shifting domicile, as are switching office environment locations and relocating pets and beneficial artwork and jewellery.

Proactive planning is the ideal tactic for New Yorkers taking into consideration changing their tax residency. The very best piece of tips: Consult a tax adviser early and generally to build the strategy and documentation wanted to complete aims.

Jonathan Curry-Edwards, CPA

Jonathan Curry-Edwards is a Tax Husband or wife in the Personal Consumer Services group at Grassi Advisors & Accountants. He specializes in tax setting up and compliance services for large-web-worth people today and households and has far more than 13 years of knowledge in public and non-public accounting. He can be achieved at Grassi’s White Plains place of work at 914-849-0332 or [email protected]