Understanding Residency For Snowbirds
The majority of states have a framework for residency based on domicile and statutory presence.
- Domicile: Your permanent home and the place you intend to return to.
- Statutory Residency: Many states consider you a resident if you spend 183 days or more there in a tax year.
If you spend the majority of your time in a northern state, and have a home and significant ties there, the state may claim you as a resident for the tax year, regardless of the time you spend in other places.
What About States With No Tax
Other states snowbirds gravitate towards like Florida, Arizona, or Texas are great options because they have no state income tax. But, if your domicile is in New York and you keep it as your tax home, you continue to owe New York income tax, no matter the amount of months you spend in Florida.
When are Snowbirds Taxed for Both States?
- Your taxes may need to be filed in both states if you are moving during the year as you may be treated as a part-year resident in both states.
- If you are receiving income in both states, like having a rental property in a different state, you may have to pay taxes in the state where the property is located.
- If your home state has an annual residency day-count limit, you may be taxed there as a resident while spending months in a no-tax state.
How to Avoid Double Taxation
- Be mindful of the number of days you spend in both states.
- Change your driver’s license address, legal papers, voter registration, and other legal documents to one state to establish domicile in one state.
- Seek help from a tax specialist who has knowledge in multi-state residency.
Wrap Up
Through careful planning, snowbirds have the ability to not be taxed by two states at a time. To take advantage of a no-tax state, you must physically and legally establish it as your domicile. If you require any expert aid, reach out to our dedicated team today. Our dedicated professionals at Dimov NYC CPA stand ready for 360-degree support.
