Primary residence in Texas, but rent and work in Indiana

[Bala M]

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Hello Tax Expert,

I'm currently primary resident in Indiana for last 20 years (both work and rent) having Indiana state Real ID drivers license. If I change my primary residence by buying a single family home in Texas say Houston area in May'2025, but still continue to rent and work in Indiana with hybrid options, 40% in Texas WFH and 60% in Indiana Office.

1) Which state I should have my Drivers' license.

2) Can I own or lease two cars, one in Texas and one in Indiana.

3) I have one car currently with Indiana registration. If I lease a second car in Texas due to my primary residence and change my drivers license to Texas,  how do I register my first car in Indiana using my Texas Drivers license for the renewal. Is it Ok.

4) I filed this year 2024 tax return while primary resident of Indiana, but in July'2025 I will file for US Citizenship.  In this case, if I change my primary residence to Texas in May'2025, then from which state I should be filing my US citizenship?, from recent tax return filed Indiana state or primary resident Texas state?.

Please clarify my questions

Kind Regards,

Bala

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[MaryK4]

I would advise you to contact legal counsel for this-  there are many factors involved with state domicile.  In the situation you describe, it seems that you are looking at the residency in order to avoid taxes, which is a serious offense (if your other state had a state income tax, this would not be an issue).

Because you INTEND to maintain residences in both places and actually spend more time in Indiana, it could be argued you are not abandoning Indiana domicile.  You would definitely want to get the Texas driver's license.

See Full-year residents; "Domicile" defined, 45 Ind. Admin. Code 3.1-1-22

[Bala M]

Thank you Sir for your response.

I'm going through the legal process of buying a home through the relator 30 year mortgage. All they requirements is a remote letter from my employer to qualify for primary residence with the other necessary documents for loan approval. Also, I will be applying for homestead in Texas county accessor office legally. So I don't see an issue of tax avoidance as you perceived. So its not an issue. I pay taxes every year. Moreover Texas property taxes are higher anyway which I'm aware and still choosing to buy home in Texas for 30 year loan and considering retirement. My question was more related to how do I manage my drivers license and registration of two cars at each state  primary residence at Texas, plus rent and work at Indiana. Looks like, I don't have an answer for this scenario. I will contact each legal departments like license branch office, Tax accessors office, my car insurance agent etc...to get some clarifications. Thank you.

[MaryK4 · Accepted solution]

Your explanations and the steps you are taking are 100% correct to establish the Texas residency.  I always caution people to issues that may come up and I am glad to see you are doing it proactively.  You definitely want to get that Texas driver's license, but you would have to contact the Indiana DMV to see how to register the Indiana auto.  This actually strengthens your case.  @Bala M 

[Bala M]

Thank you for your understanding and guidance @MaryK4