Moving to Florida, and proving it to the state you left

Florida has no income tax, so it has no residency test for income tax and no interest in whether a newcomer has really arrived. The state that cares is the one left behind. A person who moves from Westchester to Palm Beach stops paying New York tax only when New York agrees that the move was real, and New York, like Illinois, Minnesota, California and New Jersey, has a definition of resident, a set of factors, and auditors who apply them to people who file their last resident return and vanish. Becoming a Floridian is therefore mostly a matter of ceasing to be something else, and the evidence is built for the old state’s rules, not Florida’s.

Every taxing state uses two tests, and a person has to pass both. The first is domicile: the one place a person treats as a permanent home and intends to return to. The second is a statutory test that catches people who keep a home in the old state and spend too many days there, whatever they call their domicile. A retiree who sells the Connecticut house, buys in Vero Beach and never looks back passes both easily. A retiree who keeps the house up north and splits the year is the one the audit is written for.

Domicile: one home, and the intent to keep it

Domicile is the state a person has made a true, fixed, permanent home, and it does not change until a new one is established with the intent to abandon the old. The states agree on the definition and on the burden: the person claiming to have changed domicile must prove it, in New York and Illinois by clear and convincing evidence. A person who cannot prove the change keeps the old domicile by default, and the old state keeps taxing everything.

Each state publishes what it weighs. New York’s audit guidelines name five primary factors: the home, comparing size, value and use of each residence; active business involvement; time, meaning where the days are spent; the location of items “near and dear,” the heirlooms, art and pets that mark where a person actually lives; and family, chiefly the spouse and minor children. Driver’s license, voter registration, bank accounts, vehicle registration and the address on the will are listed as other factors that are “subordinate to the primary factors” and “by themselves, cannot be the basis for a residency determination,” because anyone can change them in a week. California’s Publication 1031 uses a closest-connections test with a similar list: time spent in each state, the location of spouse and children, the principal residence, licenses, voter registration, bank accounts, doctors and dentists, places of worship and clubs, real property and investments. Minnesota’s Rule 8001.0300 lists twenty-six factors, from homestead status and voter registration to hunting licenses, where the children are in school, and the location of the most active checking account, and adds that no single one decides it and that charitable giving is not considered at all. Illinois regulation 100.3020 and New Jersey’s GIT-6 say the same thing in fewer words: intent, shown by where a person votes, keeps family ties and keeps money.

The pattern across all five is that the easy steps count for little and the hard ones count for much. Changing the license and registering to vote are expected, and their absence is damaging, but their presence proves nothing. What persuades an auditor is the house sold or rented out at arm’s length, the better house in Florida, the doctors moved, the country club resigned, the safe deposit box emptied, the dog in Florida, the grandchildren visiting in Florida rather than the person flying north, and a calendar that shows the center of life has moved.

The statutory tests: a second home plus a day count

The domicile test can be won and the statutory test still lost. Four of the five states treat a person as a resident, regardless of domicile, if the person keeps a permanent home in the state and spends more than a set number of days there.

Two things about the counts. First, a day is any part of a day. Landing at LaGuardia at 11 p.m. is a New York day; stopping at the Minneapolis house to pick up mail on the way to the lake is a Minnesota day. Second, the person, not the state, keeps the count, and an undocumented day is scored for the old state. New York’s guidelines accept diaries, credit-card records, telephone bills and third-party affidavits, spot-check them, and fill gaps with “reasonable assumptions,” which in practice means a weekend between two New York days is three New York days.

The common advice to “stay under 183” is therefore necessary and not sufficient. A person who keeps the New Jersey house and spends 180 days there passes the count and still has to win on domicile, and 180 days in the old house is poor evidence of having left.

The old state’s audit

New York runs the most systematic program. Its Department of Taxation and Finance keeps more than 300 residency auditors, conducted over 15,000 residency audits in a recent five-year span, and collected more than $1 billion from them (verify). A high-income person who files a final New York resident return and a Florida Declaration of Domicile should expect a letter. The audit asks for the day count first, then the documents behind it: cell-phone records with tower locations, which the guidelines treat as the best evidence of where a person was; credit and debit card statements for each family member; E-ZPass and airline records; the insurance rider that says where the jewelry and the art are kept; the moving company’s inventory; the club memberships, resigned or kept; where the pets are licensed; where the children or grandchildren are in school.

The other four are smaller programs with the same shape. Minnesota’s rule asks where the person claims homestead, where the most active checking account is, and whether the old homestead status was allowed to lapse. Illinois looks hardest at the house: a person who keeps a Lake Forest home and spends seven months in it has not rebutted the presumption, whatever the Florida paperwork says. California follows its closest-connections list, and a retiree who leaves with a house, a business interest and an accountant still in Los Angeles has left on paper only. New Jersey treats a domiciliary who keeps a permanent New Jersey home as a resident at any day count; the exception requires no permanent home there at all and no more than 30 days in the state.

What Florida offers as evidence

Florida’s contribution to the file is a set of documents, all of them easy to get and none of them decisive on its own.

The Declaration of Domicile. Section 222.17 of the Florida Statutes lets a person who lives in a county and intends to keep a permanent home there file a sworn declaration with the clerk of the circuit court. The form is a page; the fee is about $10 plus a few dollars for a certified copy (verify); it is notarized and recorded in the county’s public records. It states the Florida address, the former state and any other residences, and it is dated, which is its main value: it fixes the date the person swore Florida was home. The old state’s auditor will read it as a statement of intent, which is what it is, and then ask what the person did about it.

The homestead exemption. The application, Form DR-501, is filed with the county property appraiser by March 1 of the year after moving in. The person must own the home and have lived in it as a permanent residence on January 1. It is worth up to $50,000 off assessed value and starts the Save Our Homes cap, and it is a sworn statement that the Florida home is the permanent one. Most states that grant a residential property-tax break require the same thing, so a person cannot sensibly claim Florida homestead and keep a New York STAR exemption or a Minnesota homestead classification on the old house. Auditors check.

License, registration, voting, and the rest. Florida requires a new resident to get a Florida driver’s license within 30 days and to register vehicles here. Registering and then actually voting in Florida, moving the bank accounts, the safe deposit box, the doctors, the will and trust to Florida counsel, the church and the clubs: each is small, their absence is noticed, and the auditor’s own list says they settle nothing. The one thing Florida does not require and the old state cares about most is time. A person who means to be a Floridian should be in Florida more than anywhere else, and be able to prove it.

The move year on paper

The old state gets a part-year resident return for the year of the move: all income received through the move date, then only old-state-source income after it. The move date should be the same on that return, the Declaration of Domicile, the Florida license and the homestead application. A move date in the return that is earlier than the license date invites the question of what the person was waiting for.

Income that follows a person after the move is the other thing to settle. Pensions and IRA withdrawals cannot be taxed by a former state under federal law once the person is a nonresident. Wages for days worked in the old state, rent from property there, and gain on the sale of property there remain old-state income for as long as they last. A person who keeps working remotely for a New York employer after moving to Florida is in New York’s convenience-of-the-employer rule, and New York will tax those wages as New York-source unless the Florida office is a genuine requirement of the employer. The nonresident return each year is where that is reported.