Quick overview

Moving between states can change your tax obligations quickly and sometimes unexpectedly. Establishing a new state tax residency (or defending the one you kept) is about more than unpacking boxes: it’s documentation, timing, and behavior. In my 15 years advising clients, the moves that led to the biggest tax savings were those backed by clear, contemporaneous evidence of intent to make the new state their home.

Why this matters

State tax residency determines where you must file resident or part‑year returns, which income is taxable, and whether you may owe taxes to more than one state. Mistakes or weak documentation can trigger audits and “double taxation” until you claim credits or negotiate assessments with state tax agencies.

Sources to consult (authoritative):

Also see FinHelp.io guides on related topics: “Establishing State Residency for Tax Purposes After a Move” (https://finhelp.io/glossary/establishing-state-residency-for-tax-purposes-after-a-move/), “State Tax Residency Checklist for Remote and Hybrid Workers” (https://finhelp.io/glossary/state-tax-residency-checklist-for-remote-and-hybrid-workers/), and “State Tax Residency Moves: Costs, Timing, and Tax Traps” (https://finhelp.io/glossary/state-tax-residency-moves-costs-timing-and-tax-traps/).

Core concepts: domicile vs. statutory residency

  • Domicile: Your permanent home—the state you intend to return to and where you keep the most significant ties (family, property, bank relationships, primary voting registration). Only one domicile exists at a time.
  • Statutory (or tax) residency: A status determined by specific state tests, often a day-count (commonly 183 days) or a combination of presence and intent. A state can claim you as a statutory resident even if your domicile is elsewhere.

Many disputes hinge on whether you genuinely changed your domicile or merely spent more time in the new state. States like California and New York examine ties, activities, and whether your stay was temporary.

Practical, step-by-step checklist to establish residency (and reduce audit risk)

  1. Document your move date and days in each state
  • Keep a contemporaneous calendar or digital log showing dates and locations. Many audits hinge on day counts; a simple spreadsheet with address and time stamps is invaluable.
  1. Change the important legal addresses quickly
  • Update your driver’s license and vehicle registration with the new state within the timeframe required by that state.
  • File Form 8822 with the IRS to update your federal mailing address (to avoid misdelivered notices): https://www.irs.gov/forms-pubs/about-form-8822
  1. Update voter registration and cast local votes
  • Registering and voting in the new state is strong evidence of intent to change domicile.
  1. Establish local ties
  • Open local bank accounts, join local clubs, get a primary care doctor, and move your primary mail/shipping to the new address.
  1. Move or sell your former primary residence (or document its rental use)
  • If you retain property in the old state, document why it’s not your primary home (e.g., long‑term rental contract, storage of belongings elsewhere).
  1. Update payroll and tax withholding
  • Give your new address to employers and update state withholding allowances. For remote workers, ensure employer payroll is using the correct work location for state tax withholding.
  1. File the correct state tax returns
  • Typically this means a part‑year resident return the year you changed states and nonresident returns in states where you earned income but were not a resident.
  1. Keep a moving binder
  • Store lease agreements, closing statements, utility bills, receipts for movers, lease start/end dates, employment contracts, and mail forwarding confirmation.

Timeframes and the 183-day rule

Many states use a 183-day (or “more than 183”) threshold to trigger statutory residency. That’s a helpful rule of thumb but not universal—some states apply different counts or additional tests (domicile, ties, or “intent”). Always check the target state’s guidance (for example, California and New York each have domicile/statutory tests documented on their tax agency websites).

If you expect to spend time in multiple states (e.g., remote work, split seasons), track days carefully. Mobile phone geolocation, travel receipts, and work logs are acceptable supportive records in many audits.

Remote work, employers, and nexus complications

The rise of remote work has added a frequent pain point: where is the income earned, and which state can tax it? A few practical points:

  • Your resident state generally taxes worldwide income. If you live in State A but work in State B (even remotely), State B may seek to tax income earned from local clients or work performed while physically present there.
  • Reciprocal agreements exist between certain states allowing you to avoid dual withholding; check state reciprocity pages.
  • Employers may be required to withhold tax for the state where the work is performed, not just where the company is located.

For remote workers, document where your work is performed each day and provide clear guidance to payroll on the correct withholding state.

Part-year and nonresident returns, and credits for taxes paid

  • Part‑year resident returns let you allocate income earned while a resident vs. nonresident.
  • If two states tax the same income, many states give a credit for taxes paid to the other state to prevent double taxation. The rules and calculation methods vary; read the state instructions carefully when preparing returns.

Audit triggers and defense

Common triggers include:

  • Conflicting records (e.g., driver’s license in State A but voter registration and primary residence in State B).
  • Large income shifts coinciding with a move (states scrutinize moves to low‑tax states).
  • Employer withholding in a state different from where you claim domicile.

If audited, present the contemporaneous documentation above—dates, registrations, bills, and written explanations of intent. In my practice, the clients who prevail in residency audits have consistent, dated evidence showing an intention to reside in the new state.

Practical examples (typical scenarios)

  • High-tax to no-income-tax move: A client moved from New York to Florida and established immediate local ties (Florida driver’s license, voter registration, transfer of bank accounts and physician). Proper timing and documentation prevented New York from claiming domicile and saved substantial annual taxes.
  • Partial-year move with retained property: Another client closed their old home sale within six months of moving and documented the sale and lease of new residence; this helped resolve a residency dispute with California.

(See official New York and California residency rules for examples and guidance: New York: https://www.tax.ny.gov/personal/residents/determining_residency.htm; California: https://www.ftb.ca.gov/file/personal/residency/index.html)

Common mistakes to avoid

  • Delaying legal address changes (licenses, voter registration).
  • Failing to change banking and medical providers.
  • Keeping significant social and economic ties in the old state without a clear reason.
  • Relying solely on travel day counts without supporting evidence of intent.

When to get professional help

If you: (a) move from a high‑tax to a low‑tax state, (b) keep a home or family ties in the old state, (c) have substantial investment or retirement income, or (d) encounter an audit or a notice from a state tax agency, consult a tax professional with residency experience. In complex cases, a CPA or tax attorney can negotiate with state authorities and present domicile evidence effectively.

Checklist: Documents to keep (minimum)

  • Lease or purchase agreement for new home with start date
  • Driver’s license and vehicle registration change records
  • Voter registration and voting records
  • Utility bills with service start dates
  • Employment letters, payroll records, and withholding forms
  • Bank account openings and address changes
  • Mail forwarding confirmation and primary mailing records
  • Travel logs showing days in each state

Final tips

  • Act fast: make legal changes during the first weeks/months after you move.
  • Be consistent: your pattern of life should match your claimed residence.
  • Keep evidence: contemporaneous, dated records matter more than retrospective explanations.

Professional disclaimer: This entry provides general information only and does not constitute tax advice. For guidance tailored to your situation, consult a licensed tax professional or attorney. Authoritative sources referenced above (IRS and state tax agencies) should be your primary legal references.

Further reading on FinHelp.io:

Sources