Winter is finally getting a firm grasp on Connecticut, and the settling cold is the cue for many residents to head South to escape the frigid conditions that put the “hearty” in hearty New England stock. If you are one of these seasonally migratory folks, make sure you consider which state will be your primary residence. Someone probably suggested that you make your Southern state your state of primary residence to save a bit on taxes. If all you do is buy a home in Florida or some other Southern state and count the days you stay in Connecticut and think you’ve changed your state of primary residence, the Connecticut Department of Revenue Services may have different ideas.
For Connecticut income tax purposes a resident is generally either someone who maintains a permanent place of abode in Connecticut and is in Connecticut for an more than 183 days of the year or someone who is domiciled in the state. Your “domicile” is place to which you plan to return. It is the place that you call home. While you may call one place your home, when the Department of Revenue Services performs a residency audit, the agents look to several factors to see if your actions match your words. The following are some of the items Revenue agents look to when determining your domicile:
- Whether you’ve lived in Connecticut before and when;
- What real property you own, how much it is worth, and in which state it is located;
- Where you are registered to vote and in which state you hold a driver’s license;
- The states in which you have filed income tax returns, what residency status you claimed and what address you put on your federal income tax return;
- Your business relations (ownership, employment, etc.) and social memberships (church/ temple/mosque, clubs, etc.); and
- Where you purchased and registered your car.
Thus, if you state you have become a Florida resident but the mailing address for your tax return, voter registration and vehicle registration all show Connecticut, the revenue agent may strongly disagree. A stronger case would be to have your more valuable property in Florida, have your car registered in Florida, be licensed to drive and registered to vote in Florida, list your Florida mailing address on your income tax returns, and join Florida social clubs.
If someone suggested that you make another state your home for tax purposes, or if you haven’t given thought to your state of primary residence, you should prepare yourself and plan against a residency audit. Taking control of the factors that the state uses to determine your domicile can give you peace of mind. It can also help protect you from two or more states claiming you as a resident for income or even estate tax purposes. If you or someone you know needs advice or assistance with state residency issues, please contact Peter Harrison at (860) 567-8718 or by email.