How Many Months Must You Live in a State to Be a Resident?

Determining state residency for tax and legal purposes is a complex challenge for individuals who move or own property in multiple states. State laws vary, and the determination involves more than just counting the days spent in a location. Establishing residency in a new state while ending it in another requires a clear understanding of legal standards and a series of deliberate actions to prove one’s intentions and avoid potential tax liabilities.

The 183-Day Rule and Statutory Residency

A common benchmark for determining residency is the 183-day rule, which many states use to establish “statutory residency.” This rule states that if you spend 183 days or more within a state’s borders and maintain a permanent place of abode there, you can be classified as a resident for tax purposes. This applies even if you consider another state your permanent home. As a statutory resident, you could be liable for state income tax on all your income, regardless of where it was earned.

States are vigilant in enforcing this rule. The method for counting days is strict, as spending any part of a day in the state often counts as a full day, including time spent for work or leisure. Taxpayers who split their time between states must keep meticulous records, as the burden of proof falls on them to demonstrate they did not cross the 183-day threshold. This time-based test is an objective measure that can override a person’s subjective intent.

Defining State of Domicile

Distinct from the time-based concept of statutory residency is the legal principle of “domicile.” A person’s domicile is the one location they consider their true, fixed, and permanent home, and it is the place to which an individual intends to return whenever they are away. While a person can have multiple residences, they can only have one domicile at any given time.

Unlike statutory residency, which is based on physical presence, domicile is determined by an individual’s intent. State tax authorities and courts look for clear evidence that a person not only moved to a new state but also intended to abandon their old home and make the new location their permanent base. This distinction is important because your domicile dictates which state has the primary right to tax your worldwide income and, upon death, your estate.

Factors in Establishing a New Domicile

To successfully establish a new domicile, an individual must take clear, affirmative steps that demonstrate their intent to make the new state their permanent home. State auditors scrutinize a wide range of factors to verify this intent, and the evidence must be consistent.

• Official and governmental actions. This includes obtaining a driver’s license in the new state, registering to vote and voting in local elections, and registering vehicles in the new location. Updating your address with government agencies like the Social Security Administration and the U.S. Postal Service also solidifies your connection. Some states offer a formal “Declaration of Domicile” that can be filed to state your intentions.
• Financial ties. This involves moving your primary banking relationships to the new state, including checking and savings accounts. All financial correspondence, such as credit card statements and brokerage account statements, should be directed to your new address. It is also important to update the address on federal tax forms like W-2s and 1099s.
• Personal and social connections. Physically moving cherished possessions to the new residence helps demonstrate that it is your true home. Engaging with the new community by joining local clubs, religious organizations, or professional groups shows an intent to integrate. Additionally, updating estate planning documents, such as a will or trust, to be governed by the laws of the new state is an indicator of your intent to remain there permanently.

Severing Ties with a Former State of Domicile

Just as important as building connections in a new state is the process of actively severing ties with the old one. Failing to cut these connections can weaken a claim of a new domicile, as it suggests the move may not be permanent. State tax authorities in the former state will often challenge a change in residency if significant ties remain.

• Property and residence. The most definitive action is to sell the primary residence in the former state. If the property is kept, its use should be clearly changed to that of a vacation home or a rental property, and it should not be maintained in a way that suggests it is ready for immediate, full-time occupancy.
• Financial and professional links. This includes closing bank accounts in the old state or reducing them to the minimum necessary for specific obligations. Professional licenses that are no longer needed should be terminated, and memberships in local clubs or social organizations in the former state should be resigned.
• Official filings. An individual must file a final resident income tax return in their former state for the year of the move, indicating they are no longer a resident. Subsequently, any income earned from sources within the old state should be reported on a non-resident tax return. These steps help create a clear record that the old domicile has been abandoned.