Why state residency tests matter

States use residency tests to decide who owes state income tax. If a state treats you as a resident, it can tax most or all of your income. If more than one state claims you, you may face double filing, audits, or tax bills unless you use credits, reciprocity rules, or apportionment.

How residency tests work in practice

Most states rely on two concepts:

  • Domicile (intent): Your domicile is the place you intend to make your permanent home. Courts and tax agencies look at where you keep your family, register to vote, hold a driver’s license, own or lease a home, and store personal effects.
  • Statutory or physical‑presence tests: Many states use a days‑in‑state rule (commonly 183 days) or a similar threshold to create a statutory presumption of residency.

Which test governs varies by state; a state can rely on either or both. For example, New York treats a person as a resident if they are domiciled in NY or if they maintain a permanent place of abode and spend more than 183 days in the state (New York State Dept. of Taxation and Finance). California evaluates domicile but also uses a nine‑month presumption in some cases (California Franchise Tax Board). Always check the specific state guidance you’re dealing with.

Real‑world example

A client moved from New York to Florida and changed most ties (driver’s license, voter registration, bank addresses). However, because he continued spending substantial time in New York for business, New York scrutinized his status and considered him a statutory resident due to the number of days and his continuing ties—resulting in a state tax bill. This shows why both intent and day counts matter and why documentation is essential.

Who is most affected

  • Remote workers who split time across states
  • Seasonal residents and “snowbirds” who live part of the year in another state
  • People who move mid‑year or maintain homes in multiple states
  • Frequent business travelers and digital nomads

Practical steps to establish or prove your residency

  1. Sever or reduce ties with the old state: change voter registration, surrender out‑of‑state driver’s license, re‑register vehicles, and close or update local accounts.
  2. Create strong ties to the new state: sign a lease or buy a home, register to vote, get a local driver’s license, and move your primary bank relationships.
  3. Track days and activities: maintain a contemporaneous calendar or travel log showing physical presence, work locations, and overnight stays.
  4. Document intent: utility bills, lease/mortgage statements, employment records, and statements of family location all help demonstrate domicile.
  5. Use state‑specific tools: some states accept a formal declaration of domicile; others consider multiple factor tests (Multistate Tax Commission; state tax agencies).

For guidance on building evidence if you expect an audit, see our guide on Proving State Residency: Building Your Case Against a Residency Audit.

Avoiding double taxation

If multiple states tax the same income, you may be eligible for a credit from the state where you reside for taxes paid to another state, or you may rely on reciprocity agreements for wage income. For strategies to reduce double taxation, see Avoiding Multi‑State Double Taxation: Credits and Apportionment.

Common mistakes

  • Assuming a single action (like buying a home) automatically changes your residency. States look at the totality of facts.
  • Not tracking days. Without records you can’t rebut a days‑based presumption.
  • Believing moving to a no‑income‑tax state immediately eliminates prior state obligations. Former state ties can sustain tax claims.

Quick FAQs

  • Can two states both tax me? Yes. When that happens, look for credits, reciprocity rules, or apportionment to avoid double taxation.
  • What if I’m audited? Produce contemporaneous records of days, proof of severed ties, and objective evidence of domicile changes; consider professional representation.

Professional tips from practice

  • Start documenting before you move. Retrospective logs are weaker in audits.
  • Use a simple spreadsheet or calendar app to log overnight locations and reasons for travel.
  • When in doubt, consult a CPA or state tax attorney—especially after high‑risk moves (e.g., NY→FL or CA↔TX).

Disclaimer and sources

This article is educational and not personalized tax advice. State residency rules change and differ by jurisdiction; consult a tax professional for your situation. Sources: New York State Dept. of Taxation and Finance; California Franchise Tax Board; Multistate Tax Commission; Consumer Financial Protection Bureau.