Whether moving before the pandemic or as a result of the pandemic, those who left New York for Florida or other warmer pastures often find themselves asking this question. Is my move legit? Will the New York taxing authorities try to send me a tax bill and expect me to pay it? Are they right?
Although the answer will depend on the details of the situation, the following provides some general guidance to give you a better idea of whether or not the state taxing authorities will have grounds to expect payment.
The easiest situation to answer involves those who no longer live or work in New York. In these situations, it is very unlikely the state would have grounds for taxation. However, there are a large number of taxpayers who live in both New York and Florida or another state. At what point will taxing authorities consider these taxpayers a resident of Florida and not of New York? It is also important to keep in mind that taxpayers can find themselves facing state taxes from more than one state. It is not a one or the other deal.
When can New York taxing authorities send me a tax bill?
Generally, this applies when you are a resident of the state. This happens when the taxpayer is domiciled in the state. The term domicile refers to the place the taxpayer considers their home state. Courts will look at the taxpayer’s length of time in each location as well as the size of home in each state, furnishings and other considerations like business involvement or items that are “near and dear” to the taxpayer. These items could include a prized set of golf clubs, family pet, or important paperwork.
To make matters even more complicated, there are some exceptions to this rule. For example, the state may tax those who are not domiciled in New York if they maintain a home in New York for most of the tax year and spend more than 183 days of the tax year in the state.
Why does it matter?
If the New York state taxing authorities believe you qualify as a resident of New York, they will tax you on more than just the income you earn in New York. They will expect taxes on all income. As a result, the taxpayer’s domicile can have a huge financial impact. Because of this impact, it is a good idea to get professional help to better ensure you understand your tax obligations. The attorneys at Goldburd McCone are familiar with these issues and can provide guidance on your obligations as well as possible tax planning strategies to better manage your tax obligations.