What Defines State Residency for Tax Purposes?

Your state residency decides your need to pay state taxes; every state has different rules on residency. Though the criteria vary, the following are the key traits that usually characterize state residency:

• Physical Presence
  According to most states, you must be physically present in the state for a particular length of time each year, usually more than half of the year.
• 183-Day Rule
  The 183-day rule states that if you spend 183 days or more in a given year in a state, you are considered a resident there.
• Domicile
  Considered your permanent home, this is the location you intend to return to after being away. Though you may live in another state, you are often considered a resident of the state where your domicile is situated.
  • Usually, a domicile is based on factors such as where you live, work, vote, and have relatives.
• Intention Test
  Several states utilize the “intention test” to decide if you mean to stay in the state. You might be considered a resident even if you are already living elsewhere if you intend to make the state your permanent home.
  • States might also take into account your voter registration, driver’s license location, and mailing address.
• Part-Year Residency
  If you move between two states, you may qualify to reside in both for a portion of the year. Under this scenario, you would typically pay taxes to both jurisdictions on the income you earned while living in either state.
• Exceptions
  For financial reasons, residency criteria are less troublesome in states like Florida and Texas as they do not levy a state income tax. You might still be considered a resident for other purposes as well, including healthcare or inheritance laws.

For more information on specific state residency criteria and taxation, click here.

This entry was posted on Wednesday, April 9th, 2025 at 9:08 pm and is filed under Personal Information, Preparing a State Return, Tax Related Questions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.