Overview

Residency status determines which state(s) have the legal right to tax your income. States use tests—often a combination of domicile, physical‑presence (statutory) rules, and objective ties—to decide whether you’re a resident, part‑year resident, or nonresident. That classification affects filing requirements, tax rates, withholding, and whether you can claim resident credits to avoid double taxation (Multistate Tax Commission).

How the tests work

  • Domicile: Your permanent legal home. You can have only one domicile at a time; changing it requires both a physical move and clear intent to abandon the prior domicile (see state guidance such as California FTB and NY Dept. of Taxation).
  • Statutory or physical‑presence rules: Many states use day counts (commonly a 183‑day threshold) plus a permanent place of abode to trigger residency for taxpayers who spend substantial time in the state.
  • Totality of circumstances: Courts and revenue departments look at multiple ties—driver’s license, voter registration, where you work, family location, bank accounts, vehicle registration, and where mail is delivered.

(In my practice as a CPA working with frequent movers, I’ve found that consistent documentary changes—like switching your driver’s license, voter registration, and primary banking—are often decisive when a state questions your residency.)

Real‑world scenarios

  • Mid‑year move: You may file as a part‑year resident in both states and allocate income earned while living in each state. See our guide on filing for part‑year residents for allocation details.
  • Remote worker who lives in State A but works for an employer in State B: You may owe taxes to your state of residence and, depending on State B’s rules, to State B on sourced income; withholding and credits can reduce double taxation.
  • High‑mobility workers (e.g., athletes, consultants): Multiple states may assert tax claims; careful tracking of days and contracts helps allocate income correctly.

Filing consequences and common outcomes

  • Resident: Taxed on worldwide income by the state of residence (if the state has an income tax).
  • Part‑year resident: File part‑year returns in each state and prorate income and deductions to the period you lived there.
  • Nonresident: Taxed only on income sourced to the taxing state (wages earned there, rental income from property located in the state, etc.).

See our Multistate Filing Basics and State Tax Rules for Remote Workers for practical filing workflows.

Documentation and audit defense

Keep contemporaneous records for 3–7 years that show where you physically were and where you maintained ties: travel logs or calendars, lease or mortgage statements, driver’s license and voter registration changes, utility bills, and employment records. If audited, a clear timeline plus corroborating documents is the most effective defense (Multistate Tax Commission; state revenue departments).

Practical tips

  • Track days in each state using a simple calendar or time‑tracking app.
  • Make concurrent objective changes if you intend to change domicile: update driver’s license, register to vote, move primary bank accounts, and change mailing address.
  • Update employer withholding promptly after a move to avoid underpayment penalties.
  • When income spans states, review whether a resident credit or reciprocity agreement applies to avoid double taxation.

Common mistakes to avoid

  • Assuming short stays don’t matter. Several states apply statutory day counts that can trigger residency even without intent.
  • Relying on only one piece of evidence (for example, just changing your driver’s license) — states look at the full factual picture.
  • Waiting to change utilities, voter registration, or banking — late changes weaken your claim if audited.

When to consult a professional

Complex cases—mid‑year moves, split families, business owners with multistate operations, or high‑income mobile taxpayers—benefit from professional review. In my experience, early planning reduces audit risk and unexpected tax bills.

Quick checklist for a year‑of‑move

  • Start a day‑log of where you physically spend each day.
  • Change driver’s license, voter registration, and primary bank branch if you intend to establish a new domicile.
  • Notify employers and adjust withholding or payroll state elections.
  • Save lease/mortgage, utility, and closing documents.

Frequently asked questions

  • How many days trigger residency? Many states use a 183‑day‑type rule for statutory residency, but specifics vary—check the taxing state’s rules before assuming application.
  • Do states coordinate to prevent double taxation? Yes; most states provide resident credits or reciprocal rules; you may also apportion or allocate income between states.
  • Is there a federal residency test? No—state residency is different from federal residency concepts; states set their own rules.

Resources and authoritative sources

Internal resources

Professional disclaimer: This article is educational and does not replace personalized tax advice. Consult a qualified tax advisor or your state revenue department to determine how residency rules apply to your situation.