How To Change State Residency When You Move (2024 Guide)
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Moving from one state to another requires intensive planning. You’ve got to invest in new forms of identification, update your tax records, and establish domicile. Learn how to change state residency in our guide below, whether you’re relocating for retirement, work, school, or simply a change of scenery.
State Residency Requirements
Familiarize yourself with your new state’s requirements before you start the process of changing your residency. Each state has its own rules and requirements for becoming a resident, and these can change your tax obligations and access to state benefits.
Researching Your New State’s Laws
Visit the official government websites of your destination state. Search for “new state residency requirements” along with the name of your new state to find accurate and up-to-date information. These resources will spell out the steps you must take to become a resident, and will likely include any forms you need to fill out.
Minimum Time Requirements for Residency
Most states require that you spend a minimum of 183 days in the area before you establish residency. This means you must spend about a half a year in the new state before the state considers you a resident for tax purposes. The exact timeframe can vary, so check your state’s specific guidelines.
Establishing Domicile in Your New State
Establishing domicile is the first step in changing your state residency. This involves demonstrating your intent to make the new state your permanent home.
Defining Domicile vs. Residency
Residency refers to the place in which you physically live, and domicile involves additional legal implications. Your domicile is the place you intend to return to after being away. You can have multiple residences, but you can only have one domicile.
Key Steps To Declare Domicile
Follow the steps below to establish domicile in your new state:
- Obtain a local driver’s license from the DMV or Secretary of State.
- Register your vehicle in the new state.
- Update your mailing address with the USPS.
- Register to vote in your new location.
- File a Declaration of Domicile form if your new state requires it.
These actions are necessary for legal and tax purposes.
Updating Legal Documents and Records to Change Residency
Changing your state residency requires updating a wide range of legal documents and records. Read more below.
Essential Documents To Update
Update the documents below when you’re changing your residency:
- Bank accounts, investment accounts, and credit cards
- Driver’s license and vehicle registration
- Federal tax returns (use IRS Form 8822)
- Health, home, and car insurance policies
- Social Security benefits
- Utility and service provider accounts
- Voter registration
Timeline for Updating Records
Start updating your records as soon as you move to your new state. Many states require you to update your driver’s license and vehicle registration within a period of 30 or 60 days after you establish residency. Try to complete updates within the first few months of your move to keep all your records consistent and current.
Navigating Tax Implications of Changing Residency
Changing your state residency can come with significant tax implications, especially if you’re moving to or from a state with different income tax rates.
State Income Tax Considerations
If you’re moving from a state with high tax rates to a state with lower or no income tax, you may be subject to closer scrutiny from your original state’s tax authorities. Be prepared to provide documentation that proves your new residency status. If you’re moving to a state with higher taxes, familiarize yourself with the new tax laws and how they might change the way you approach your finances.
Potential for Residency Audits
States that feature high income tax rates, such as New York or California, sometimes conduct residency audits. These audits verify that someone who claims to have moved to another state is no longer a resident of the original state. These audits can be thorough and may examine various aspects of your life to determine your true domicile. Keep meticulous records of your move and new residency to protect yourself in case of an audit.
Demonstrating Intent To Live in Your New State
Below are methods with which you can prove your intent to live in a new state:
Physical Presence Requirements
The 183-day rule is a common benchmark, but your physical presence isn’t always enough to establish residency. States may look at other factors to determine your true domicile, such as where you spend your holidays, maintain business connections, or keep your most valuable possessions.
Creating Ties in Your New Community
Enroll your children in local schools, join local organizations or religious institutions, and establish relationships with local healthcare providers to show your commitment to your new state. You should also open new bank accounts or safe deposit boxes and get involved in community activities.
These measures create a paper trail that helps to support your claim of residency.
Special Considerations for Dual Residency
You may find yourself tied to multiple states in some cases, which can lead to dual residency status. Read more below.
Understanding Dual Residency Status
Dual residency is the result of having significant connections to more than one state. This can happen if you own homes in different locations or work in one state while maintaining residence in another. This can complicate your tax obligations and legal status.
Managing Residency in Multiple States
If you have ties to multiple states, we recommend consulting with a tax professional that can spell out your obligations. Keep detailed records of the time you spend in each state and be aware of each state’s residency rules and tax laws. Decide which state you want to claim as your primary domicile after you discuss this matter with your tax pro.
Changing Residency for College Students
College students have unique challenges with respect to residency, especially if they attend school out of state. Read more below.
In-State Tuition Requirements
Many colleges offer lower tuition rates for in-state residents, but simply attending school in a certain state doesn’t always qualify you for in-state tuition. Each institution has specific requirements for establishing residency, and these may differ from general state residency rules.
Maintaining Home State Residency While in College
Attending an out-of-state college is considered a temporary move for most students, and you can usually maintain residency in your home state while attending school elsewhere. This approach benefits you with respect to taxes, benefits, and scholarships that are tied to your home state residency.
FAQ About Changing State Residency
What is the easiest state to which you can change residency?
Texas, Florida, and South Dakota are the easiest states to which you can change residency. These states have no income tax, which makes establishing and maintaining domicile easy. Other states without income tax include Alaska, Nevada, Washington, and Wyoming.
What is the difference between residency and domicile?
Residency refers to the place in which you physically live, and this can change throughout the year. Domicile is more permanent, subjective, and has more legal connotations, including tax implications.
Do I need to change my residency when moving for college?
No, you don’t need to change your residency when moving for college. You can maintain residency in your home state while attending an out-of-state college.
Can I change my residency to a state I’ve never lived in?
Yes, you can change your residency to a state you’ve never lived in if you establish a genuine connection and intent to make that state your permanent home. Declare domicile, buy a home, obtain a driver’s license, and register to vote in the new location.
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