What Is the 183-Day Rule in New York for Taxes?

New York’s approach to income taxation can affect individuals who might not consider the state their primary home. The state employs a detailed set of rules to determine who is obligated to pay New York income tax, extending its reach beyond those who live there year-round. For individuals splitting their time between New York and other locations, understanding these regulations is important. Physical presence within the state’s borders is a primary factor in this analysis, and taxpayers must be aware of how their time spent in the state is measured.

Determining New York Statutory Residency

New York law establishes a category known as a “statutory resident” for income tax purposes. This concept is distinct from “domicile,” which is the place an individual considers their permanent home and intends to return to when away. An individual can have their domicile in another state but still be classified as a New York statutory resident, subjecting them to New York taxes as if they lived there permanently.

To be considered a statutory resident, an individual must meet two conditions for the taxable year. The first is they must maintain a “permanent place of abode” in New York. The second is they must be physically present in New York State for more than 183 days.

Failure to meet just one of these conditions means an individual is not a statutory resident. For example, a person could spend 200 days in New York, but if they do not maintain a permanent place of abode in the state, they would not be classified as a statutory resident. Conversely, owning a home in New York is not enough on its own; the day count threshold must also be crossed. The burden of proof falls on the taxpayer to demonstrate with clear evidence that they did not meet both parts of the test.

Defining a Permanent Place of Abode

The first part of New York’s statutory residency test hinges on the definition of a “permanent place of abode.” This refers to any residence maintained by the taxpayer that is suitable for year-round living, including a house, apartment, or condominium that the individual owns or leases. The dwelling must be a place where a person can live with a degree of permanence.

The taxpayer must “maintain” the abode, which involves contributing to its upkeep or having a legal right to use it. If a taxpayer’s spouse owns or leases a residence, it is also considered a permanent place of abode for the taxpayer. The dwelling must be suitable for year-round use, meaning it is winterized and has facilities like cooking and bathing. A rustic, seasonal cabin without heating or plumbing would likely not qualify.

Court decisions have added that the taxpayer must have a “residential interest” in the property, establishing a personal connection between the taxpayer and the dwelling. For example, in one case, an individual who stayed at a parent’s home to provide care was not deemed to have a permanent place of abode because he did not have a true residential interest in their home. This prevents the state from classifying any available living space as an abode without considering the taxpayer’s relationship to it.

Certain types of lodging are excluded from this definition. A barracks on a military base or a dormitory room for an undergraduate student is not considered a permanent place of abode because they are temporary living situations.

The 183-Day Physical Presence Test

The second component of the statutory residency test is the 183-day rule. New York’s method for counting days is exacting, as any part of a day spent within the borders of New York State is counted as a full day. This means a brief visit for a business meeting or a short layover at an airport constitutes a full day in the state’s tally.

This “any part of a day” rule applies regardless of where the person stays or the purpose of their visit. For example, if an individual domiciled in another state drives through New York on their way to New England, that travel day counts as a New York day. Similarly, a flight from California to Europe with a connection at JFK Airport would add a day to the count.

The state allows for a narrow exception for travel days under specific circumstances. A day spent traveling through New York from a point outside the state to another destination outside the state is not counted, provided the individual does not engage in other activities within New York.

There is also a specific medical exception, though it is difficult to meet. If an individual is confined to a medical facility as a patient, the days of confinement are not counted as New York days. This exception does not apply to a person in New York for outpatient treatment or to care for a hospitalized family member.

Tax Implications of Residency Status

An individual’s residency status has major financial consequences. If a person is classified as a New York statutory resident, they are subject to New York State income tax on their entire worldwide income. This means all income, regardless of where it was earned, becomes taxable by New York, including salary from an out-of-state job or investment income.

This tax treatment is identical to that of an individual domiciled in New York. If the statutory resident’s permanent place of abode is within New York City or Yonkers, they may also be subject to local income taxes on their worldwide income. The state provides a credit for taxes paid to other states on income earned there to prevent double taxation.

Conversely, if an individual does not meet the test for statutory residency, they are taxed as a nonresident. A nonresident’s tax obligation to New York is limited to income derived from New York sources. This includes wages earned for work performed in New York, income from a business conducted in the state, or rental income from New York property.

Income from intangible sources, such as interest, dividends, and capital gains from the sale of stocks and bonds, is generally not taxable to a nonresident unless it is connected to a New York business. This distinction is the primary reason why the residency determination is so important.

Recordkeeping and Documentation

Given the aggressive enforcement of its residency rules by the New York State Department of Taxation and Finance, maintaining detailed and accurate records is a practical necessity. The burden of proving non-residency status rests entirely on the taxpayer, who must provide clear and convincing evidence to support their position during an audit. Without sufficient documentation, it is difficult to challenge a determination made by the state.

The most effective evidence consists of contemporaneous records, which are documents created at the time of the activity. A detailed daily calendar or diary noting the taxpayer’s location each day is a foundational piece of evidence. It is advisable to keep these records organized and readily accessible for several years, as a residency audit can occur long after the tax return has been filed.

Useful documentation includes:

• Travel itineraries, airline and train tickets, and hotel receipts to establish dates spent outside of New York
• Credit card and bank statements that show the geographic location of transactions to corroborate a taxpayer’s presence
• Cell phone records, including call logs and data usage reports that indicate cell tower location
• E-ZPass statements that can be used to track travel into and out of the state