Changing your state for tax purposes?

Is it a good idea? The short answer is: It depends on the state.

Using a mailing address in a different state

If you want to change your state, first you’ll need to establish a mailing address in a different state and use it on your federal tax return. It can be the address of family who lives in that state or, if you don't have family in the state where you want to claim residency, this service can arrange mail forwarding for you.

This measure alone may be sufficient for certain states such as NY, MA, and CT.

States with stricter requirements

States which recognize the Foreign Earned Income Exclusion but tax your unexcluded earned income require a more thorough process to cut ties. You’ll have to change your driver license, your voter registration, your car registration, and your bank accounts. You’ll also have to be able to prove to the satisfaction of the state commissioner that your move is not temporary and you do not have plans to return to that state in the future. Some of the toughest states are VA, SC, and NJ.

If you lived in California

If you lived in CA and your reasons for moving abroad are work-related, then you do not have to cut ties with your state. You can keep your driver license, voting registration, etc. in CA because you will be considered a nonresident for as long as you live and work overseas as long as your work assignment lasts more than 546 consecutive days and you spend less than 45 days in CA each calendar year.

Please contact your tax advisor for a state filing requirement analysis which takes into account your state and your tax situation.

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