topic How To Determine Residency: MD (Permanent Home) and DC (Rent an Apartment for Work) in State tax filing

How To Determine Residency: MD (Permanent Home) and DC (Rent an Apartment for Work)

mhaha520 — Fri, 03 Jan 2020 04:26:23 GMT

My permanent home is in Maryland (MD), which is also the state where I am registered to vote, where my vehicle is registered, where most of my belongings reside, where I reside when not at work, and where my employer is headquartered. For convenience and a shorter commute, I will be renting an apartment in the District of Columbia (DC) for the next year-and-a-half while I am on assignment at another location (it's cheaper than a hotel) and also maintain my rental property in MD. Both MD and DC define "residency" by the number of days one resides in the state (more than 183 days in a year or where one maintains an "abode"), and by that definition alone, I spend slightly more days/nights in MD than in DC. I do not consider DC to be my home, however, and have no plans to change my permanent address, voter registration, vehicle registration, etc. How do I determine which state I should pay income taxes in given these circumstances and how each state defines "resident" status?

Re: How To Determine Residency: MD (Permanent Home) and DC (Rent an Apartment for Work)

Hal_Al — Tue, 28 Jan 2020 19:04:36 GMT

You're probably not going to get a firm straight forward answer, based on the complications of your situation. My answer is gong to be wishy-washy. I would continue to file as a MD resident, just for simplicity. That said, I'm also of the opinion that you are now a DC resident for tax purposes.

"and also maintain my rental property in MD". That sounds like you are renting out "My permanent home is in Maryland".

That helps in deciding the answer to your complicated situation; you are a DC resident. You no longer have a permanent home in MD, you have investment property in MD. Furthermore, in determining "tax home", a "temporary job assignment" is one that is expected to last less than 1 year, even when your intent is to return.

Your situation is further complicated by the reciprocity agreement between DC & MD.

Re: How To Determine Residency: MD (Permanent Home) and DC (Rent an Apartment for Work)

TomD8 — Sun, 05 Jan 2020 14:33:33 GMT

I suggest you consult a local tax professional.

Your situation is potentially one of dual residency. You are a domiciliary resident of MD, because that is the location of your permanent home. If you rent an apartment in DC as you plan, you may additionally become a statutory resident of DC. Here is DC's rule: "Section 47-1801.04(17) of the DC Official Code describes a statutory resident as any individual who maintains a place of abode within the District for an aggregate of 183 days or more during the taxable year, whether or not such individual is domiciled in the District."

Both DC and MD tax residents on ALL their income.

Since DC and MD have tax reciprocity, it is possible that neither will give an out-of-state credit for taxes paid to the other. Thus you may face dual taxation.