Article on NY audits of Florida tax refugees

[MichaelB]

At that point you just need to prove that you are a resident of your new state and did not spend 183 days in the sticky state (consecutive or not).

You can spend more days than that in NY and not have all your income taxes as a resident. Likewise, you can spend 30 days in NY and still be taxed as a resident. It depends on other factors, not a day count.

But let's say that I was one of those professionals that you mention, my practice was still in NY but I was fully retired... other partners were running the business but I still had a financial interest in the business and was receiving income from the business.... and I had all the requisite things covered and didn't step foot in NYS all year

I can see that any income from the practice would be taxable on a non-resident return, but only the NY income, all other income would be tax in the state of residency. That is the way it works for my mom... she is a FL resident but has an income producing property in a high tax state and files a non-resident return to pay state tax on that income, but none of her other income is subject to state tax.

If you’re not working in NY and don’t live there, you won’t be considered a resident. If you earn income there, you will be taxed.

 

[copyright1997reloaded]

When I finally leave NY State, I intend to have zero days there.

 

[JoeWras]

We'll be leaving NY in about 5 years after we stop working. My biggest fear is not being able to find exceptional food. Can't beat NY pizza, bagels, Italian food and upscale steak houses.

Down in Tampa unfortunately the above is mainly true, although there are exceptions to some extent.

Stick to the East Coast, FL for NY food. The West Coast, FL has Midwest transplants, who bring their food with them.

Then stop complaining, all of ya!

 

[Spock]

Move to Minnesota. Your former state of residence will NEVER question your tax liabilities...MN would send them a bill.

When I left MN, MN was threatening to tax 401K/IRA withdrawals regardless of what state you lived in later. If you earned the $ in MN when you deferred the income, MN was going to tax it when you withdrew it.

 

[Dtail]

Stick to the East Coast, FL for NY food. The West Coast, FL has Midwest transplants, who bring their food with them.

Then stop complaining, all of ya!

No complaints, just statements.
Still prefer the West Coast over the East Coast.

 

[RenoJay]

Fourteen years ago, when I was a high earner, I moved from high tax CA to no tax NV. Fortunately I did everything by the book (kept no residence in CA, changed my doctor, dentist, accountant, place of worship, etc. to NV) but the stories I heard about the CA Franchise Tax Board made me incredibly paranoid for years. Fortunately I think they got the point that I legitimately moved.

 

[Andre1969]

Yep. I have friends that moved from MD to FL to retire, and now like to poke fun about Maryland's high tax rates. But then when they complain about the state of their roads and infrastructure and public services, I be sure to take the opportunity to remind them that I *chose* to live in one of the counties in MD with the highest local tax rate. That is why I can fill out an online form about a pothole or even faded lane markings and it will be fixed a week or two later! Dealing with permitting and the courts here have been really easy for me, and the local schools are excellent. (I also can't stand the climate in Florida, but that's a completely different thread...)

Thanks for posting this. My Mom and stepdad are in a similar situation. Back in 2002 they bought a second home down in Florida, and talked about moving down there when they retired. But, they both retired in 2011, yet they're still up here in Maryland. They'll use the place in Florida as a vacation getaway, but just won't make the plunge. BUT, they sure do love to gripe about Maryland!

Personally, I don't think it's *that* bad. But, I've lived here my whole life, and just don't know anything different. But, taxes can vary greatly, by county, and even by city, I'm sure. I used to live in Prince George's County, but recently moved to Anne Arundel. My Mom and stepdad live in St. Mary's County. Mom was recently complaining because she had an old refrigerator she wanted to get rid of, and would have to pay to have it hauled away. Or, if they took it to the dump themselves, they'd have to pay. But, in Anne Arundel, I think I could just call bulky trash to come get it. And I know for a fact I can just take it to the dump myself and get rid of it, for free. I know PG has free bulk trash pickup, but I think you might have to pay, if you take it to the dump yourself.

But, she also pays less in property taxes than I do in AA County, or I did in PG. Although interestingly, St. Mary's county takes more in income tax than Anne Arundel. But, overall, you get what you pay for.

For the most part, AA County's property taxes seem lower than PG, for an equivalent type home. But, I've also noticed a bit of a reduction in services and other things. For instance, the streets don't seem as well maintained. And, out where I live, they're narrow, no sidewalks or curbs, etc. Of course, get into the more rural areas of PG, and you get that as well. There seems to be less police presence as well, but, at the same time, it doesn't seem like we need it out here as much!

I honestly have no idea what my Mom and stepdad would give up in Florida, compared to Maryland, as far as level of local services go. But I'm sure there's something.

 

[gerntz]

Yep. I have friends that moved from MD to FL to retire, and now like to poke fun about Maryland's high tax rates. But then when they complain about the state of their roads and infrastructure and public services, I be sure to take the opportunity to remind them that I *chose* to live in one of the counties in MD with the highest local tax rate. That is why I can fill out an online form about a pothole or even faded lane markings and it will be fixed a week or two later! Dealing with permitting and the courts here have been really easy for me, and the local schools are excellent. (I also can't stand the climate in Florida, but that's a completely different thread...)

A $ in taxes doesn't buy as much in a high COL state as in a low one. I also imagine FL doesn't have many potholes comparatively due to the lack of much freeze/thaw that largely causes them.

 

[Dtail]

A $ in taxes doesn't buy as much in a high COL state as in a low one. I also imagine FL doesn't have many potholes comparatively due to the lack of much freeze/thaw that largely causes them.

Yes, minimal potholes in Western FLA and those that appear on main roads usually are paved over soon enough.

 

[JoeWras]

A $ in taxes doesn't buy as much in a high COL state as in a low one. I also imagine FL doesn't have many potholes comparatively due to the lack of much freeze/thaw that largely causes them.

It is no joke that road building and maintaining is cheaper in FL. For much of the state, the grade requires almost no change. Compare that to many states north where hills have to be moved. In south FL, they just come in and skim off the top layer of sand and old shells, lay down a more stable base that isn't too thick, and pave with asphalt. Very fast. Many of the bridges are over canals, and just require pounding in reinforced concrete pilings. No big fuss there either. And then frost heaves and potholes are only a concern in the far northern reaches of the state.

There are other reasons FL can run a tighter budget for public services, but some of that may wander into politics.

 

[LOL!]

New Yorkers leaving NY to save state income taxes is an old meme. Lots of Florida license plates on Long Island. Sometimes entire neighborhoods get up and move to Florida or South Carolina. It is even likely that some of the "auditors" for NY will move to Florida to escape taxes.

And it is not just leaving NY. David Tepper moved to Florida from New Jersey. When a billionaire moves it can significantly change state tax inflows: https://www.nytimes.com/2016/05/01/business/one-top-taxpayer-moved-and-new-jersey-shuddered.html

 

[mrfeh]

So a state is being aggressive about collecting taxes that are owed.

I'm okay with that.

+1

I'm always perplexed how the IRS and state departments of revenue are portrayed as the bad guys.

The tax cheats are the bad guys.

 

[joeea]

We'll be leaving NY in about 5 years after we stop working. My biggest fear is not being able to find exceptional food. Can't beat NY pizza, bagels, Italian food and upscale steak houses.

Pizza and bagels - no matter how good - are not exceptional food.

 

[jim584672]

Papa John's is not pizza.

 

[gerntz]

Yes, minimal potholes in Western FLA and those that appear on main roads usually are paved over soon enough.

Well, what about your sink holes?

 

[gerntz]

Lots of Florida license plates on Long Island.

In January?

 

[Chuckanut]

Pizza and bagels - no matter how good - are not exceptional food.

Ummm... depends on who makes the pizza.

 

[jabbahop]

When I left MN, MN was threatening to tax 401K/IRA withdrawals regardless of what state you lived in later. If you earned the $ in MN when you deferred the income, MN was going to tax it when you withdrew it.

Makes sense logically but a pain if someone has moved several times like we have.

 

[easysurfer]

Tax collectors doing their job.

Who knows when some folks stocked up on quality Scott toilet paper but presents themselves as owning dollar store quality .

 

[pb4uski]

When I left MN, MN was threatening to tax 401K/IRA withdrawals regardless of what state you lived in later. If you earned the $ in MN when you deferred the income, MN was going to tax it when you withdrew it.

My understanding is that federal law precludes them from doing that.

.... In 1995, Representative Barbara Vucanovich (R-Nev.) and Senator Harry Reid (D-Nev.) proposed legislation (H.R. 394) to address these public policy concerns. While Congress recognized that states have the right to raise revenue in many ways, and that some states have the statutory right to tax many types of nonresident retirement (deferred) income, it also determined that the practice of taxing nonresidents’ pension income is too great a financial burden on retirees. Accordingly, the bill passed both the House and Senate and was signed into law by President Clinton (4 USC Section 114) on January 10, 1996. The law was entitled the Pension Income Tax Limits Act (“PITLA”) and applies to qualifying distributions from deferred compensation plans received after December 31, 1995. PITLA prohibits a state from imposing income taxes on certain retirement income of individuals who are not residents of or legally domiciled in that state. The determination of an individual’s residence or domicile for purposes of applying PITLA is made in accordance with the laws of the taxing state(s).

There are numerous categories of “qualifying distributions” which are protected from “source tax” imposition by PITLA. All distributions from qualified trusts under IRC Section 401(a)(“qualified plan” distributions), annuity plans under Sections 403(a) and (b), IRA distributions, eligible IRC Section 457 plan distributions, and IRC Section 408(k) SEP distributions are protected. ...

https://www.congress.gov/104/plaws/publ95/PLAW-104publ95.pdf

 

[sengsational]

When I left MN, MN was threatening to tax 401K/IRA withdrawals regardless of what state you lived in later. If you earned the $ in MN when you deferred the income, MN was going to tax it when you withdrew it.

My understanding is that federal law precludes them from doing that.

Barbara Vucanovich (R-Nev.) and Senator Harry Reid (D-Nev.) proposed legislation (H.R. 394) to address these public policy concerns.

Thanks for the research/post. And "yay" for these two if they made it happen.

 

[sengsational]

Thanks Michael for the specifics on NY. Quite interesting. The idea that current NY earnings even while they accept you are a resident elsewhere seems perfectly fair. My concern, and probably that of many others here, is a state not letting go of residency and attempting to tax all of your tIRA withdrawals. Or worse, what MN was trying to do according to Spock.



If I were worried, I'd just hire a lawyer that specialized in the topic, but the time has not come for me (might never come if DW doesn't change her mind). Not that bad because I already live in a state people from the NE escape to, hehe! But 5.75% ain't nothing, and we have a fair number of potholes. I wonder if there is a place where the specific tactics of the sticky and even less sticky states are enumerated?

 

[NYEXPAT]

My DH was reading about this to me on the phone.

Our governor was howling on the news about the loss of income tax revenue from the rich leaving NY. It is good reading for the new outflux of NY expats.

We are New Yorkers and part of our plan is to leave NY after retirement. It is my home, but the taxes and COL on LI are too high and DH is totally fed-up (although certainly our income tax will drop dramatically when we are no longer employed.)

I still have sons living on Long Island, but this type of article makes me nervous about keeping the family home for them to live in.

Ok, how many here have been to "Little Vincent's" in either Huntington or Lake Ronkonkoma?

Down in Tampa unfortunately the above is mainly true, although there are exceptions to some extent.

We'll be leaving NY in about 5 years after we stop working. My biggest fear is not being able to find exceptional food. Can't beat NY pizza, bagels, Italian food and upscale steak houses.

 

[NYEXPAT]

I transferred my assets overseas before leaving NYS. I filed one last tax return with IRS and NYS for the six months I was still there. Never heard from NYS again. IRS asked me where my return was the following year, but I ignored the letter and have never heard from them again!

 

[pb4uski]

I transferred my assets overseas before leaving NYS. I filed one last tax return with IRS and NYS for the six months I was still there. Never heard from NYS again. IRS asked me where my return was the following year, but I ignored the letter and have never heard from them again!

Hope you don't plan on returning.

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.