The coronavirus (COVID-19) pandemic has significantly impacted nearly everything, including businesses, individuals, and CPAs grappling with its effects upon state and local taxation. (Please see the authors’ previous column, “COVID-19 and the ‘Great Lockdown’: Telework Multistate Tax Consideration,” July/August 2020.) One of the key issues that CPAs must now address is whether recent pandemic-related migrations and relocations are sufficient to support a claim of a change of tax residency from one state to another, or whether such changes may have otherwise triggered other multi-state personal income tax consequences.

This article is intended to provide individuals who maintain a home (primary or secondary) in New York with an overview of the applicable rules and raise the question of whether they may be at risk of a New York residency audit. Moving out of New York (state or city), from an individual income tax perspective, can be a “sticky” process and more complex than many expect.

The criteria used in a residency analysis are extremely fact intensive—and, in some cases, can even hinge on a single day! It is important to remember that each individual’s situation is different, which makes the analysis somewhat subjective. Lastly, while these rules can be confusing, there are two foundational residency concepts—“domicile” and “statutory residency” — that must be addressed to determine whether an individual is a New York “resident” for income tax purposes.

An Overview of New York State’s Rules

Generally, New York residents are subject to New York personal income tax on all of their income—including earned income (e.g., wages) and unearned income (e.g., dividends, interest, capital gains). Nonresidents, by contrast, only pay tax on income earned from New York sources. Accordingly, it is extremely important to understand the basic rules that New York State (and City) apply in determining residency status. It is equally important for individuals to maintain meticulous records in case their tax returns are subject to audit scrutiny—the likelihood of which is increasing as a result of a shift to remote work due to the pandemic.

Under New York Tax Law, a “resident individual” for income tax purposes generally means an individual who is “domiciled” in or a “statutory resident” of New York. Under New York Tax Law section 605, a “resident individual” includes anyone who is:

  • Domiciled in New York, unless he maintains no permanent place of abode in New York, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than 30 days of the taxable year in this New York, or
  • Not domiciled in New York, but he maintains a permanent place of abode in New York for substantially all of the taxable year and spends in the aggregate more than 183 days of the tax year in New York (e.g., is a “statutory resident”).

The authors’ experience has shown that individuals are often not aware of the intricacies of these rules. Individuals routinely claim to have changed their domicile from New York to another state (e.g., Florida), only to learn that, for tax purposes, they may still be deemed to be domiciled in New York. The same is true for individuals who are domiciled outside of New York but who, upon audit, are found to be New York statutory residents. (Indeed, individuals are often surprised to learn that they can legally be treated as a resident of more than one state.) This is an area that is highly scrutinized by the New York State Department of Taxation and Finance (DTF) and a proliferation of residency audits focusing on the 2020 tax year are anticipated due to pandemic-related migrations and the acceleration of remote work.

What is a “Domicile”?

While there is no statutory definition of “domicile,” the law is clear that a domicile is the place that an individual intends to be her permanent home—the place to which such individual intends to return whenever she has been absent.

DTF regulations at 20 NYCRR 105.20(d) provide that:

A domicile, once established, continues until the individual in question moves to a new location with the bona fide intention of making such individual’s fixed and permanent home there. No change of domicile results from a removal to a new location if the intention is to remain there only for a limited time; this rule applies even though the individual may have sold or disposed of such individual’s former home. The burden is upon any person asserting a change of domicile to show that the necessary intention existed.


Although an individual certainly may have more than one house, she can have only one domicile. If a person has two (or more) homes, the individual’s domicile is the place that she regards and uses as his permanent home. When evaluating a person’s intentions, the length of time spent at each location, comparison of the size of each home, furnishings, and other factors are considered, but may not necessarily be conclusive.

As noted above, an individual’s domicile is the place to which the individual “intends” to be his or her permanent home. As intent can be difficult to determine, DTF has issued Non-Resident Audit Guidelines, which set forth five primary factors that are used in addressing domicile determinations. If the five primary factors are inconclusive, an auditor will then review an extended list of secondary factors that provide a framework for evaluating whether a reasonable conclusion can be established that an individual has demonstrated a change in their domicile away from New York to a new location.

The five primary factors are as follows:

  • Home. This factor examines the number of residences available to an individual during a taxable year and compares the location, size, value, and use of each residence.
  • Time. The second factor considers the amount of time an individual spends in each jurisdiction. There is a rebuttable presumption that an individual spends more time in her home (domicile) state. Accordingly, an auditor will examine how and where an individual spends his time during each day of the year. This includes an inquiry of the individual’s travel activity, lifestyle, whether she is retired or actively involved in a business or profession, as well as where she is spending holidays and time with family.
  • Active business involvement. The third factor considers an individual’s economic and financial activities. This refers to how and where an individual earns a living, whether she is actively involved in any business ownerships or professions as well as consideration of the nature and character of income earned.
  • Items “near and dear.” The fourth factor evaluates the location of the individual’s possessions, especially those with significant monetary or sentimental value, such as family heirlooms, collections, important papers and records, and other items that enhance the quality of their life.
  • Family factors. The fifth factor analyzes an individual’s familial ties, including the location of spouses, children, and extended family. This could implicate the location where minor children attend school, as well as the location where a spouse spends time throughout the year.

Changing Domicile

With the sudden and dramatic impacts of the COVID-19 pandemic, including mandated social distancing, significant travel restrictions, and the rise of remote work-from-home arrangements, the 2020 and (so far) 2021 tax years have seen widespread migration and relocation. The focus of a residency audit will be to examine whether these moves were, in fact, permanent or merely temporary. Individuals claiming to have changed their domicile away from New York should plan now to deal with these issues.

In anticipation of a more mobile work-force and the widespread adoption of teleworking on a more permanent basis going forward, enabling individuals to live and work in different locations with more ease than in the past, the DTF’s current rules may well require updating. Nevertheless, taxpayers and CPAs must be prepared to answer questions regarding these five factors to support a claim of a change in domicile.

The list below comprises additional steps for individuals that are considering relocating from one state to another. Although each of these statements represents a step that may be used to establish a change in domicile, in the final analysis, domicile is a subjective matter, based on sentiment and associations. No one step in isolation will guarantee success in changing domicile for tax purposes; the following steps will help to support a domicile change and will presenting a fuller story to the auditor.

  • Purchase a home or an apartment in the new state. If you choose to rent instead, execute a lease for as long a term as possible and spend significantly more time in the new state than the old state.
  • Move as much personal property as possible to the new home, even if you maintain living quarters in your old state, especially items with personal or sentimental value (e.g., family pictures, valued artwork, sculpture). Document that these possessions have been relocated by keeping shipping or moving documents.
  • Open a safe deposit box in the new state and transfer all valuables and pertinent papers that were held in the old box, and then close it.
  • File resident income tax returns in the new state, if applicable, and claim any available homestead rebates.
  • Maintain important papers (e.g., birth certificates, Social Security cards, marriage and divorce records, copies of tax returns) at the new location. Where appropriate, notify authorities of an address change.
  • Register to vote in the new locality, vote there in the next election, and relinquish the right to vote in the former state.
  • Obtain a driver’s license in the new domicile and cancel the old one.
  • Register any vehicles in the new state and cancel old vehicle registrations.
  • Change the mailing address or transfer major accounts to banks in the new state and close former accounts.
  • Execute a new will, whereupon the laws of the new state will be used to determine whether the will is valid.
  • File a change of address form with the IRS. Show your new address on your next federal income tax return (Form 1040) and on all future federal tax returns.
  • Send letters of resignation to former clubs and organizations or seek nonresidential membership.
  • Join local organizations and clubs in the new state.
  • Do not renew any theater, ballet, opera or sporting event subscriptions from the old state.
  • Inform all credit card companies, frequent flyer affiliates, and similar organizations of the change of address.
  • Change all your magazine subscriptions to the new address.
  • If you continue to maintain a home or apartment in your old state, arrange for the utility bills to be sent to your new address.
  • Open charge accounts in the new state with local vendors, such as service stations, florists, bakeries, and department stores.
  • Establish relationships with doctors, dentists, and other professionals.
  • Inform stockbrokers to change your account’s address to the new state.
  • Use a local insurance broker.
  • Send change of address forms to everyone, including the Social Security Administration, doctors, dentists, and professional advisors. Notify the post office to forward all mail to the new home address.
  • Apply for a new passport using the new address, even if your current passport has not expired.
  • Cancel or minimize subscriptions to cable television services at the old home and subscribe in the new locality.
  • File a declaration of domicile in the new state, if permitted. Florida is among the states that provide for filing such a declaration.

With the sudden and dramatic impacts of the COVID-19 pandemic, including mandated social distancing, significant travel restrictions, and the rise of remote work-from-home arrangements, the 2020 and (so far) 2021 tax years have seen widespread migration and relocation.

Statutory Resident

Aside from asserting that an individual remains domiciled in New York, the DTF can also assert that an individual, domiciled elsewhere, is nevertheless a “statutory” tax resident if he maintains both a permanent place of abode in New York and spends more than 183 days in the state during a given tax year. This relatively straightforward set of criteria can become extremely complicated: What is an “abode”? What if one has access to the abode for only part of the year? What constitutes a “day”? What if one is in New York to see a doctor or just traveling through? There are significant regulatory and judicial authorities on each point. However, unsuspecting individuals, such as an executive who legally resides in Connecticut or New Jersey, but works in New York and rents a small apartment in Manhattan (used only when working late at the office), can become a statutory resident and incur significant personal income tax liabilities as a result.

The DTF regulations define a “permanent place of abode” as:

A dwelling place of a permanent nature maintained by the taxpayer, whether or not owned by such taxpayer, and will generally include a dwelling place owned or leased by such taxpayer’s spouse. However, a mere camp or cottage, which is suitable and used only for vacations, is not a permanent place of abode. [NYCRR 105.20(e)(1)]


It is important to realize that New York has historically interpreted a “permanent place of abode” in broad terms, ranging from the reasonable (such as ownership of a co-op or rental apartment) to the peculiar [such as access to a dormitory room within a Catholic rectory; see In re John M. Evans, 199 AD2d 840, NYS Appellate Division (1993)]. In addition, “intent” related to the use of an abode is not relevant; so if a New York non-resident maintains a vacation property in New York, they likely have a “permanent place of abode” and the residency analysis will then turn to the “day count.” [See, e.g., In re John Barker, DTA #822324 (N.Y. Tax App. Trib.) (January 13, 2011); In re Nelson Obus, DTA #827736 (N.Y. Tax App. Trib.) (January 25, 2021).]

Moreover, in counting the number of days spent within the state for purposes of the statutory resident test, presence for any part of the day constitutes a “day” spent within the state. There are only very limited exceptions to this rule; for example, presence in the state may be disregarded if solely for the purpose of boarding a plane, train, ship, or bus for travel outside New York or while transiting through New York to a destination outside the state. The DTF also excludes “medical days,” where an individual is admitted as a patient to a New York hospital. It will be interesting to see whether medical issues arising from the COVID-19 pandemic might require the DTF to consider expanding what is otherwise a narrow exemption.

As noted above, the counting of days spent within New York is a critical element of the statutory residency analysis. If an individual is not domiciled in New York but maintains a permanent place of abode in the state for a “substantial” part of a calendar year, such individual will be considered a resident if he spends more than 183 days in New York during the year.

The DTF’s audit policy defines “substantial” to mean a period exceeding 11 months. For example, an individual who acquires a permanent place of abode on March 15 and spends 184 days in New York would not be a statutory resident because the permanent place of abode was not maintained for substantially the entire year (although he or she may be classified as a “part-year” resident, which is beyond the scope of this article). Similarly, if an individual maintains a permanent place of abode at the beginning of the year but disposes of it (or leases it such that he no longer has access to the abode) on October 30 of that tax year, he should not be a statutory resident despite spending more than 183 days in New York.

Any person who maintains more than one permanent place of abode should maintain proper books and records that substantiate her day-to-day whereabouts for the entire year, such that she would be able to demonstrate the number of days spent within New York (or, in the alternative, outside of New York). Unfortunately, any individual selected for a residency examination is, under most circumstances, presumed to be a New York resident unless she can prove otherwise; in other words, the burden of proof typically falls on the taxpayer to demonstrate her location on any given day and to provide documentation in support of their claim.

Because residency determinations can be extremely complex, navigating through a residency audit can be confusing, time consuming, and a costly trap for the unwary, especially given the recent events surrounding the pandemic and shifts to a more mobile and remote workforce.

Accordingly, individuals owning or renting more than one home should retain adequate records—including cell phone bills, credit card bills, receipts, EZ Pass toll invoices, landline phone bills, travel records, bank statements (especially those that document ATM activity), minutes of board meetings, country club records—as well as a diary, or appointment log or calendar to help establish their whereabouts and to prove the days they spent outside New York. It is equally important to document weekends, vacations, and holidays because New York does not distinguish between work and nonwork days when counting days for purposes of the statutory resident test.

Because residency determinations can be extremely complex, navigating through a residency audit can be confusing, time consuming, and a costly trap for the unwary, especially given the recent events surrounding the pandemic and shifts to a more mobile and remote workforce. Everyone who thought they had definitively abandoned their New York residence due to the pandemic should ask their tax advisor to take a closer look.

Corey L. Rosenthal, JD, is a principal and the state and local tax practice leader at CohnReznick LLP, New York, N.Y.
Lance E. Rothenberg, JD, LLM, is a state and local tax senior manager at CohnReznick LLP, Parsippany, N.J., and New York, N.Y.