Inflation calculator - What it cost then and now Will your flight back to your former city get in at 11:55 pm? Those five minutes in-state may count as a day against your total. Still sit on the board of a company or other organization in your former home state? Better hope the quarterly meeting won't push you over the 183-day mark. That's why tax experts advise clients who've moved to keep a meticulous travel log, complete with gas, toll and airline receipts, credit card records and the like.Īnd be prepared for some weird scheduling problems. "If you're straddling the line closely, be prepared for more scrutiny," said Kathleen Thies, senior state tax analyst at CCH. Requirements vary, but typically you must spend less than 183 days in a state to be considered a non-resident. It's also important to keep proof of how many days you actually spend in your old state. The client ended up having some back-and-forth with Massachusetts tax authorities to remedy the situation. One client, for instance, moved from Massachusetts to Florida, but the custodian of his retirement plan kept withholding Massachusetts tax on his annual distribution. You may also need to file a non-resident return to your old state if you earned any income there.Įven a minor oversight could create a headache, Blakesberg noted.
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To avoid suspicion and prove that you've established legal permanent residence in the new state, you'll have to jump through some hoops.Īs soon as you move, you should change your driver's license, car registrations, voter registration and mailing address for all bills and financial statements. Quiz: Which state has the highest income tax rate? (Texas, South Dakota, Washington, Wyoming and Alaska also don't impose income taxes, while New Hampshire and Tennessee only tax interest and dividend income.)īut other states may get more aggressive in pursuing former residents, now that technology lets them analyze data better and faster from places like the IRS, said Cara Griffith, editor-in-chief of state tax publications for Tax Analysts. New York and California are known as particularly aggressive in pursuit of former residents who've moved to places like Florida and Nevada. And it isn't exclusive to wealthy people, but they are more likely to be shuttling between properties in different states and end up in the cross hairs of the taxman. This issue, of course, doesn't only apply to people who move to states without income tax. "States will often take the most minute shred of evidence to make an assumption of residence and follow that path in pursuit of collecting state taxes," said CPA Jon Blakesberg of Boca Raton, Fla.
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