Half move to Florida?

[sengsational]

Not really seriously thinking of moving at the moment, but as I was doing my NC taxes, I saw a separate fields for residency ("you" and "spouse"). We've talked about it and I figured I could be away from NC for more than 6 months per year (say 4.1 months in Florida, my new residency and 2 traveling). DW could do 4.1 months in Florida, and maybe a few weeks traveling is all she wants, so more than 6 months in NC.

If I changed my residency to Florida, and she stayed as an NC resident, how does income tax work? For instance, if I was a Florida resident, would I have saved a bundle on my recent mega Roth conversion? NC rate: 5.25%, Florida rate: 0%. The Roth account is in my name, if that makes a difference.

I know, tail wagging the dog and all that, but this is more about curiosity. And if I were serious about it, I'd hire a pro. But I figured someone on here might have experience with this kind of thing.

 

[Dash man]

Some states may challenge your residency if you spend less than six months in the new state and still own your residence in the old state. I don’t know about NC, but I’ve heard of other states challenging it including my state of Pennsylvania. I’d check carefully what NC requires of you to give up NC residency before making a move.

 

[Bamaman]

To me, it's all or nothing. I had a friend that lived in his condo in Florida 6 months and 1 day per year--and he used that address to file income taxes. He kept Florida drivers license and auto license plates. He also carefully documented where he was day by day. He returned to his old home the rest of the year. His income came from investments and a large business in Arkansas that the stock was in his children's names.

I think you may need to read the instructions of the State of North Carolina state income taxes to see what they say.

 

[MrsHaloFIRE]

Agree PA chased my butt to GA for taxes. I didnt even earn any income the 8 mos straddling 2 tax years we lived there. That was fun to prove. Heres the W2 i dont have ..

Im told VA will chase you. A retirement class (ARmy) JAG cautioned against say using your motherinlaws mailing address in VA while figuring out your next step. He claimed VA taxman will want his money.

 

[RunningBum]

From https://www.ncdor.gov/media/12938/open#page=5

You were a resident of North Carolina if you were domiciled in this state at any time during 2021 or if you resided in this state during 2021 for other than a temporary or transitory purpose. In the absence of convincing proof to the contrary, an individual who is present within North Carolina for more than 183 days during the taxable year is presumed to be a resident, but the absence of an individual from the state for more than 183 days raises no presumption that the individual is not a resident.

The part bolded by me says that just because you were out of the state just over 1/2 the year is not good enough.

When I split nearly 50/50 between 2 states (VA and TX), I made sure that I spent more time in TX, voted in TX, saw dentists and doctors there only (except in emergency), registered my car there, had a library card and checked out books regularly, all that kind of stuff. And I made sure I kept some proof like a grocery or gas station receipt in TX at the beginning and end of a stretch I stayed there to show I had at least 183 days there.

VA still came after me one year, probably because I had a house there, and also kept a second car there but I never knew for sure why. I just wrote an explanation that this was my 2nd home state and listed many of the above factors as proof of my other state residence. It also helped that I had never been a VA resident. It happened that I moved out of NC at the end of a year and the next year spent time in both VA and TX.

A lot of this I got from a friend who had a lawyer give an opinion (in a letter I saw) that recommended those things when he was looking at moving from NC to a tax-free state. The key thing was to show that he was moving to another state without intention to return later. He could actually return later, but keeping a house in NC, seeing a doctor there, etc, would show lack of intention to leave the state.

Whether they would actually flag you as still being an NC resident, I can't guess, but if they did, I'm pretty sure they would consider you an NC resident and bill you for NC income taxes owed. Keeping property in NC would be a pretty easy way for them to flag it.

 

[Jerry1]

In Michigan, our house (property) taxes are given an exemption of 50% for the Michigan house being my homestead. If I moved and kept this house as my second home, my property taxes here would double. Not sure if that would be more than I save by moving to a no tax state, but it would certainly eat into the benefit. On the other end, FL may have a significantly higher tax, like sales taxes, that would also counter the benefit. Point being that you’d want to look at all fees and taxes you have in NC and in FL.

 

[braumeister]

as I was doing my NC taxes, I saw a separate fields for residency ("you" and "spouse").

In Kentucky, we can file as "Married, filing separately on combined return". It's an unusual filing status, and has us separating income by owner, and prorating all joint income as we decide. It always results in a lower tax bill than the regular joint filing. Perhaps NC has a similar status?

 

[sengsational]

As I expected, so much I don't know about it. If I ever got serious about it, I'd hire a pro because my patience with deciphering these kinds of rules is lacking.

... Keeping property in NC would be a pretty easy way for them to flag it.

My original intention was to make a "clean break" and not have anything left in NC for them to glom onto. But that appears not to be an option. Thanks for the quote about 1/2 year. That makes sense [just being gone for 6 months doesn't cut it]. Necessary, not sufficient. If one did the move due diligence, plus prove less than 1/2 year in NC, I don't think I'd need to prove where I was the other 1/2 of the year.

 

[JoeWras]

Oh no, don't leave us sengsational!

Seriously, the income tax is a bite in the butt. It is one reason I've gone easy on Roth conversions. It has also given me pause to large cap gain harvesting, since NC hits you hard on cap gains compared to the feds.

For FL, just don't forget some of the other stuff such as insurance costs, real estate, and so on. Still pretty sure FL comes ahead regardless, just maybe not as much as appears obvious.