State Residency Audits: What Counts as Home for Tax Purposes

Quick answer

State tax authorities decide your residency using a mix of three tests: domicile (your permanent home and intent), physical presence (how many days you spend in the state), and objective ties (driver’s license, voter registration, utilities, bank accounts, family and business connections). Some states also apply statutory rules—e.g., a 183-day threshold combined with domicile can trigger residency in some states like New York (NYS Dept. of Taxation and Finance).

Key factors auditors look for

• Physical presence: logs of days in the state (calendars, flight records, phone location summaries).
• Domicile and intent: where you say your permanent home is (deeds, lease terms, where you receive mail).
• Objective ties: voter registration, state driver’s license/ID, vehicle registration, where your family lives, school enrollment for children, memberships.
• Financial and business ties: bank accounts, professional licenses, where you work, business registrations.
• Lifestyle evidence: utility bills, subscriptions, social club memberships, and even social-media or calendar evidence.

(Authoritative reference: New York statuary residency guidance and state tax departments vary; see NYS guidance: https://www.tax.ny.gov/pit/file/statutory_residency.htm and general guidance at https://www.irs.gov/.)

Common residency categories auditors use

• Domicile: Where you intend to make your permanent home. It’s about intent supported by facts.
• Statutory resident: Many states treat you as a resident if you maintain a residence and spend a set number of days (commonly 183) in the year; New York’s rules are a well-known example.
• Part‑year resident: You changed residency during the year; you file part‑year returns in both states for the period of residency.

Practical documentation checklist (what to collect and keep)

• Day‑count proof: calendar entries, work logs, mobile location history, flight/train receipts, toll or parking records.
• Official IDs: driver’s license or state ID, voter registration card, vehicle registration.
• Housing evidence: mortgage/deed, lease agreements, closing statements, property tax bills, utility bills (showing service dates).
• Financial records: primary bank statements, pay stubs with state withholding, retirement plan statements, business registrations.
• Family and social ties: school enrollment records, spouse’s/children’s records, medical provider records.
• Mail and delivery records: USPS forwarding, primary mailing address for credit cards, subscription services.

In my practice advising clients through audits, the single most helpful items are contemporaneous day‑counts and a consistent pattern across official documents (license, voter registration, bank statements). Inconsistent claims—like a claimed non‑resident who has a state driver’s license and vehicle registered there—are common audit triggers.

How to respond if you’re selected for a residency audit

1. Assemble the documentation above and organize it chronologically.
2. Provide a concise cover letter explaining your residency timeline and key facts (dates of move, intent evidence).
3. If weeks/days are disputed, submit calendars and corroborating records (work schedules, travel receipts).
4. Engage a CPA or tax attorney early—states often have negotiation or audit appeal processes.
5. Consider voluntary disclosure or amendment if you discover earlier filings were incorrect; that can reduce penalties in some states.

Common pitfalls to avoid

• Relying only on a mailing address or absentee property ownership as proof of residency.
• Forgetting that no state income tax does not eliminate residency questions (Florida and Texas don’t tax wage income, but they still accept residency claims and may want proof).
• Assuming a single factor (like time spent) settles residency—auditors evaluate the totality of facts.

Examples

• A remote worker who spends most weekdays in State A for clients but maintains a home, voter registration, and family in State B may be treated as domiciled in State B—but if they meet a state’s statutory day test in State A and keep a residence there, State A may assert taxing rights.
• Snowbirds must document the dates they leave and return; simply spending winters in a warm state without changing key documents (license, voter reg.) often invites scrutiny.

Helpful resources and internal guides

• For how states define residency tests: State Residency Tests: Where You’re Considered a Resident.
• If you travel frequently or live nomadically, see our documentation guide: State Residency Audits for Digital Nomads: Documentation That Helps.
• For movers, our year‑end checklist can reduce confusion: State Tax Residency Checklist for Year-End Movers.

Final notes and disclaimer

Residency rules vary by state and facts matter. This article provides educational information based on common state audit practices and my 15+ years advising clients, not individualized tax or legal advice. Consult a CPA or tax attorney for case‑specific guidance and to confirm current state rules (see your state’s department of revenue website and the IRS for federal context).