Complicated(to me anyway) state residency questions?

[pb4uski]

Based on my experience, and our company has a lot of remote workers, income is always taxed based on the state in which the work is done, not where the employer is located. Depending on state laws, technically they might expect you to file a nonresident return even if you work from another state while traveling (although that might also be hard to prove or enforce). From https://www.britannica.com/money/tax-residency-status:

+1 I traveled a lot across the US for work and for our timesheets we had to include a location code that was used for state income tax purposes. One year I had to file 9 state income tax returns. The firm provided us all with a free version of TurboTax to make it easier.

 

[Helen]

What happens if you have a home in two different states but don't spend six months and a day in either state? We live in Oregon and are thinking about buying a second home in AZ. We currently winter in Palm Springs, this year for four months and two months in AZ. When we return to Oregon we will probably do our typical 4 - 6 weeks traveling around outside of Oregon.

Would switching our banks, voting, car registration, doctors, dentists, etc to AZ be enough even if we were only there five months?

 

[pb4uski]

In the situation that you describe it would be more of a judgement call and more tax risk if you claim to be resident in a state with the lower tax burden, but they would look at where you spend your time, where your homes are located and how much time you spend at each, where you declare homestead benefits, where you vote, where your drivers license is from, doctors, dentists, etc so it is best to focus all those on the state that you want to be from if you don't spend more than 183 days in any one state.

 

[OldShooter]

Actually, there is pretty good advice in this thread, and this is not a question to ask the Ky tax authorities. They have no incentive to assist the OP

Obviously, but they will read him the rules. Understanding the published rules is the first step in figuring out how to achieve what the OP wants.

Actually, if the statutory definition that you found (the 183 day standard/post #8) is all there is and that's what the state tells the OP, then life is much simpler than what much of this thread's discussion implies.

 

[JP.mpls]

Northforker,
Something I didn't think about when doing this:

I've owned my home in MN for 40 years. If it isn't my primary residence when I sell, I'm going to owe a large amount of capital gains tax.

I was going to sell, but I didn't find anything I wanted to buy. I was looking at townhomes.

Now my plan is to change my residency back two years prior to selling in the future. Not the greatest situation.

Take care.

 

[pb4uski]

I considered this but since we had only owned our home for 15 years when we "moved" from VT to FL and we had rebuilt only 9 years earlier, we didn't have a significant gain.. I think the fair value was about the same as what we had into it.. so it wasn't an issue for us.

 

[MichaelB]

What happens if you have a home in two different states but don't spend six months and a day in either state? We live in Oregon and are thinking about buying a second home in AZ. We currently winter in Palm Springs, this year for four months and two months in AZ. When we return to Oregon we will probably do our typical 4 - 6 weeks traveling around outside of Oregon.

Would switching our banks, voting, car registration, doctors, dentists, etc to AZ be enough even if we were only there five months?

It’s difficult, because there is no standard to define state residency. Each state follows its own definitions, and most states don’t define residency at all. Most state tax authorities have their own guidelines which may not even be published, so it’s incumbent upon the taxpayer to understand what those are and then figure out how to avoid them.

In this case, you would need to demonstrate to the Oregon tax authorities you are no longer an Oregon resident, even though you still own property, use it regularly and spend more time there than any other location. I suspect that the fact you spend more time in Oregon than anywhere else will make that case very difficult to prove. If you were to spend more time in one other location your case would be stronger, as you could point to that as your “base” or place or permanent residency.

 

[Northforker]

Northforker,
Something I didn't think about when doing this:

I've owned my home in MN for 40 years. If it isn't my primary residence when I sell, I'm going to owe a large amount of capital gains tax.

I was going to sell, but I didn't find anything I wanted to buy. I was looking at townhomes.

Now my plan is to change my residency back two years prior to selling in the future. Not the greatest situation.

Take care.

Thanks,
We are not selling our home in Kentucky anytime soon barring a health issue, we lovingly refer to it as our "base camp" or "storage unit" because we come home for a 6-8 week stint in the spring and a similar period in the fall. It has an 50 x 60 "RV" barn and a 5 br 3 ba home on Ky lake. We like it here in moderate temps. we typically spend 100 to 110 days a year here.

 

[Which Roger]

What happens if you have a home in two different states but don't spend six months and a day in either state? We live in Oregon and are thinking about buying a second home in AZ. We currently winter in Palm Springs, this year for four months and two months in AZ. When we return to Oregon we will probably do our typical 4 - 6 weeks traveling around outside of Oregon.

Would switching our banks, voting, car registration, doctors, dentists, etc to AZ be enough even if we were only there five months?

I have friends who own homes in IL and NV. They do not spend 6 months in either home, as they are often traveling. They claim that the days when they are in neither home can be counted toward either state.

 

[pb4uski]

I have friends who own homes in IL and NV. They do not spend 6 months in either home, as they are often traveling. They claim that the days when they are in neither home can be counted toward either state.

Wishful thinking on their part methinks.

 

[calmloki]

What happens if you have a home in two different states but don't spend six months and a day in either state? We live in Oregon and are thinking about buying a second home in AZ. We currently winter in Palm Springs, this year for four months and two months in AZ. When we return to Oregon we will probably do our typical 4 - 6 weeks traveling around outside of Oregon.

Would switching our banks, voting, car registration, doctors, dentists, etc to AZ be enough even if we were only there five months?

Suspect it would work. We were decades long Oregon residents and have our rentals here. Bought a place down in La Quinta Ca back in 2010 and started being snowbirds and California residents, her first, then me 7-8 years later. We are now Kaiser Permanente health members in California and visiting KP members in Oregon. Registered voters in Cal. Home address on all bank accounts in Cal. We have our car's registrations and our driver's licenses in Oregon and inform our car insurance company that we are garaging one car here every winter.
We do file and pay some taxes in Oregon based on the rental income. We don't count our days in each place too closely, but it's about six and six. Oregon hasn't given us any trouble, but until I declared Cal residence they would take runs at me every couple years. Fought them off, noting that I'd voted, paid taxes and served on an Oregon Grand Jury in the year they wanted taxes on.

 

[calmloki]

Edit: To the point, Oregon hasn't tried to get more taxes from me or us yet, nor chased us as unleashed Oregon residents and we're paying them a very small percentage of the state taxes we pay.