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State residency tests determine which state can tax your income, claim you as a resident, or require withholding. Mistakes cost money and invite audits, so understanding the tests and documenting your facts is essential.

Background and why this matters

States developed residency tests to assign taxing rights fairly and prevent taxpayers from escaping state tax by merely spending minimal time elsewhere. Today, the rules affect remote workers, frequent travelers, seasonal residents, retirees, and business owners. Residency affects not only income tax but also credits, estate issues, and eligibility for state programs.

How the tests work: domicile vs. statutory residency

  • Domicile test: Focuses on your permanent home and intent. You can have only one domicile at a time. Courts and tax agencies look at where you intend to return, where your family lives, where you keep personal effects, and where you hold key records.
  • Statutory (days-based) test: Uses a days-in-state threshold—commonly 183 days (about six months) or a similar count—to trigger residency for people domiciled elsewhere. Some states combine both approaches.

Important caveat: rules vary by state. For example, New York’s statutory-resident rule ties presence (usually 183–184 days) to maintaining a permanent place of abode; other states apply a straight-days test, and a few states (Florida, Texas) do not levy personal income tax. Always check the specific state guidance before relying on a rule of thumb (see state resources below).

Real-world example (typical issue)

A client moved to Florida but kept an apartment and bank accounts in New York and visited frequently. New York treated her as a resident because she maintained a permanent place and spent significant time there. We documented the move, changed her voter registration and driver’s license, and provided day logs and utility records to support her Florida residency for the audit.

Who is affected

  • Remote employees who split time between states
  • Seasonal or part-year residents and retirees
  • Business owners operating across state lines
  • Digital nomads and frequent travelers

What to document (audit checklist)

  • Day-by-day travel log (dates and locations)
  • Lease/mortgage statements, closing documents
  • Driver’s license, voter registration, and vehicle registrations
  • Utility bills, property tax bills, and insurance policies
  • Employment records and pay stubs showing withholding
  • Health care records and school enrollments (if applicable)

Practical tips and strategies

  1. Keep a contemporaneous day log and supporting receipts—IRS or state auditors expect date-stamped evidence.
  2. Align strong ties with your intended domicile: obtain a driver’s license, register to vote, and change your mailing address.
  3. Sever ties with your former state when you move: sell or rent out the house, close local accounts, and transfer doctor/patient relationships when possible.
  4. Review withholding and estimated tax setup for each state where you work; incorrect withholding can trigger audits and penalties.
  5. Get professional help from a CPA or tax attorney before filing amended returns or responding to a state residency notice—complexity and penalties can escalate quickly.

Common mistakes

  • Relying only on time counts without addressing domicile indicators.
  • Failing to track days precisely—cellphone calendars, credit-card records, and travel receipts make the best evidence.
  • Neglecting mid-year moves: you may need to file part-year returns and recalculate credits.

Interlinks (related FinHelp articles)

Short FAQs

Q: Can I be domiciled in one state and a statutory resident of another?
A: Yes. Domicile is about intent and your permanent home; a statutory resident test can tax you if you meet the days-and-connection threshold in a second state.

Q: Is the 183-day rule universal?
A: No. Many states use a 183-day rule, but thresholds and additional conditions differ. Check the state’s tax authority guidance.

Professional disclaimer

This article is educational and not individualized tax advice. State residency rules are fact-intensive and vary by jurisdiction. Consult a licensed CPA or tax attorney before changing residency or responding to a state tax notice.

Authoritative sources and further reading

If you’d like, I can review a list of your ties and dates to help you prepare documentation for a residency claim or audit (not a substitute for formal tax advice).