Residency rules vary from state to state. For example, if you spend more than a certain number of days in some states, you're considered a resident even if you were not living in the state for very long.
It's best to check with your State Department of Revenue for specific residency rules, especially as they apply to your particular situation. In the meantime, use the examples below as a general guideline.
Generally, you're a resident of a state if you don't intend to be there temporarily. It's where home is – where you come back to after being away on vacation, business trip, or school.
Think of it as your permanent home (for now), but don't confuse "permanent" with "forever." Nothing is forever.
- You live in Idaho. Every November, you go to Arizona for the winter and return to Idaho in April. You're an Idaho resident.
- You're a student at the University of Minnesota, originally from Indiana. After graduation, you plan to move back to Indiana, at least for the time being. You're an Indiana resident.
- You quit your East Coast job and moved west, with no particular destination in mind. You end up in New Mexico, where you've been living for the past year. You're not sure you'll stay there – California beckons – but for now, it's your home. You're a New Mexico resident.
- Note: This example isn't real obvious. The key is the word "moved" – you abandoned your previous state to move west – combined with New Mexico residency laws. A perfect example of why you should always defer to your state's residency rules if you're ever in doubt.
For tax purposes, you are a nonresident of a state if you temporarily worked there (with no intention of making it your home) or you received income from sources in that state, such as rental property.
- You live in Colorado and work during winter as a ski guide. In summer, you work as a rafting guide in neighboring Utah.
- You'll need to file a Utah nonresident return, in addition to your Colorado return, so you can report your summer income to Utah.
- You live in California and own a rental in Arizona.
- You'll need to file an Arizona nonresident return, in addition to your California return, so you can report your rental income to Arizona.
- You live in New York and you just became the beneficiary of your late aunt's Connecticut farm, which continues to earn income.
- You’ll need to file a Connecticut nonresident return, in addition to your New York return, so you can report your beneficiary income to Connecticut.
Tip: In general, you only need to consider income you earned by physically working out-of-state, or money generated by out-of-state property or sales. You wouldn't need to file a nonresident return to report interest from an out-of-state bank or if your employer's headquarters are located in a different state.
You are a part-year resident of a state if your permanent home is located there for a portion of the tax year, for example if you moved from one state to another.
You moved to Georgia from Arkansas. Georgia is your new home and you don't intend to move back to Arkansas. For the tax year in which you moved, you'd be a part-year resident of both Arkansas and Georgia and will file part-year returns in both states. Next year, assuming you're still in Georgia, you'll just file a resident Georgia return.
Here the rules are pretty straightforward. Your Home of Record (the state you enlisted in) is also your State of Legal Residency (SLR) no matter where you're stationed, unless you submitted paperwork to change your SLR to somewhere else. There are also rules for military spouses.