If retired and only have SSI, annuities and investments for income, and live in two states equal time, can I chose which state to be resident state?

[herberteverettpe]

We are retired and are snowbirds between Michigan, 6 mo and Oklahoma, 6 mo.   Michigan taxes retired people less than Oklahoma.  I have been an Oklahoma resident on my federal taxes.  Can I change my resident status to Michigan for better tax treatment?  I have been filing partial year residency in both states, allocating my income according to my time living in each state.  But the questions presume that the moves are permanent and not temporary, leaving me to question if I am filing correctly.  What defines my residency?

[MichaelMc · Accepted solution]

Residency is based on the concept of domicile. Your domicile is the place where you have family connections, lived and/or worked, belong to a house of worship, and, most importantly, the place to which you intend to return after you have been away. Once you have domicile somewhere, it remains until you move away and abandon the intent to return. 

You describe yourself as a snowbird, so I assume you originated in Michigan and "flew south" for the milder winter in Oklahoma. So, if your domicile was Michigan during your working years and you intend to return there, as your current pattern of travel would indicate, then Michigan is still your domicile, and is the place where you are a resident for tax purposes. Michigan would have the right to tax you worldwide, year-round income, but should allow a credit for taxes paid to Oklahoma.

You would file a nonresident (not part-year resident) tax return in Oklahoma, reporting only your income earned in the state.