Soon will be the time of year when snowbirds begin dusting off their suitcases and charting their travel routes to escape the Empire State’s first snow. While the cold New York winters are certainly one incentive to fly south, some flock to Florida to establish or maintain their non-New York residency for tax purposes.
New York residents are subject to state income tax on all income derived from all sources, while nonresident individuals are only subject to state income tax on income derived from New York sources. New York source income is defined as the sum of all income, gains, losses, and deductions derived from or connected to New York based assets, such as real or tangible property.
The state of New York can tax an individual as a resident if one of the following applies (1) the person is domiciled in New York, or (2) the person is not domiciled in New York but is considered a “statutory resident” of New York.
Domicile is defined as the place where one lives and intends to reside indefinitely. An individual can only have one domicile, even though he or she can own more than one home. While it seems like an easy task, one cannot simply purchase a home in Florida to establish Florida domicile. The following infographic illustrates the steps necessary to establish Florida domicile.
New York Statutory Residency
Even if Florida domicile is properly established, New York will look to whether an individual is considered a Statutory Resident when assessing state income tax. If deemed a Statutory Resident of New York, state income tax can be imposed on an individual’s worldwide income. An individual is treated as a New York Statutory Resident for income tax purposes if (1) he or she maintains a permanent place of abode in New York, and (2) the individual spends more than 183 days in New York each year (the “183-day rule”).
Any type of dwelling can qualify as a permanent place of abode, and it is irrelevant whether an individual owns or leases the property. For instance, if a Florida domiciliary keeps a summer home in New York, the summer home will be considered a permanent place of abode in New York. This applies regardless of whether the home is titled in the individual’s name, or in the name of an entity. Further, to be considered a permanent place of abode, the summer home must be maintained for “substantially all of the taxable year,” or a minimum of 11 months.
Under the 183-day rule, the burden of proof is on the taxpayer to establish that they were not present in New York for more than 183 days. It is important to note that any part of a day spent in New York is counted as a full day” under the 183-day rule. Therefore, if you wake up in New York, but take a 9:30AM flight to Florida, you’ve spent a full day in New York.
For questions on how to properly establish Florida domicile and avoid being deemed a Statutory Resident of New York, please contact Stefanie L. Pate.
Stefanie Pate is a Partner in the firm’s Estates & Trusts Practice Group, as well as the Nonprofits & Tax-Exempt Organizations Group. Stefanie is based in the firm’s Pittsburgh office, and is licensed to practice in Pennsylvania, Florida, and New York. She can be reached at 412.261.1600 or firstname.lastname@example.org.
Farah Bayonova, JD Candidate 2024, Western New England University School of Law, contributed to the research and drafting of this article.
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