New York is a part of the Tri-State area. Many people who do not live in New York work in the state and vice versa. You may perform part of your work in New York and part of it out of the state. There may be legal issues about where you need to file your tax returns and to which state you owe money. It is critical that you get everything correct with your tax return. If not, you might receive a surprise tax bill from a state to which you did not think you owed money. A tax lawyer can advise when you are considered a resident for purposes of New York State tax laws.
Even if you spend some of your time elsewhere, you may still be considered a resident of New York State for purposes of tax laws. If you are a New York resident, you must pay state taxes on all of your income, regardless of where it was earned. Those who are not residents of New York State only need to pay tax on New York sources of income. It is essential that you fully understand New York tax laws (or hire a professional who does) before you file your return, regardless of where you actually live, because there may be ramifications of mistakes.
In general, there are two main tests that New York uses to determine who is a resident for purposes of filing their taxes. You can meet the definition of a New York resident if you qualify under either test. Discuss any concerns or incorrect tax bills with an NYC tax attorney at Thorgood Law Firm today.
Domicile Test
The first test asks where you maintain your true, fixed, and permanent home. A domicile is the residence that you treat as your home. There are several factors that New York considers in determining the location of your domicile. These factors include the following:
- Where you own a home and maintain your primary residence
- Where you have business and professional ties
- The location of your family and social connections
- How much time you spend in New York versus in other locations
Once you meet the requirements of the domicile test, you need to show a clear intent to change your residence to another state. If you do not, you would be considered a New York resident until you are able to do so.
There are several things that you can do to change your domicile for purposes of New York taxes. Selling your home in New York or renting it out to someone else might demonstrate that you are no longer domiciled in the state. You can also take certain formal administrative steps, such as changing your driver’s license to another state or your professional licenses. Again, your actions must demonstrate a clear intent to change your domicile and be ready to prove it if you are scrutinized by New York authorities.
Statutory Residence Test
Even if you are not domiciled in New York, there are still other ways that you can be considered a resident of the state for tax purposes. Even if your primary residence is in another state, you could be a statutory resident of New York if both of the following apply:
- You have a permanent place of abode in the state for at least 11 months out of the year
- You are present in New York State for at least 184 days in the year
You may be a statutory resident, even if you do not think that you meet the requirements. For example, partial days are counted as full days for purposes of the test. In addition, an abode can be many different types of buildings, including a home or an apartment, or even a structure that you do not own.
New York May Closely Monitor Your Actual Residence
New York has an interest in ensuring that you are paying full state income taxes if you are deemed to be a resident of the state. The state may conduct an audit to determine whether you are actually a resident of New York, potentially making you responsible for paying taxes under state law. They may have noticed red flags that caused the audit. These red flags can include:
- Frequent or extended stays in New York
- Maintaining multiple homes or apartments
- New York-based family and social connections
- Holding a New York driver’s license, vehicle registration, or voter registration
- High NY-source income without filing as a resident.
How a New York City Tax Lawyer Can Help You
When it comes to your residency and any tax issues relating to it, you need help from a New York tax lawyer. A tax attorney can help you by doing the following:
- Determining whether you meet either the domicile or statutory residence tests that can make you a New York resident
- Helping you plan ahead for your tax requirements
- Defending you and telling your side of the story if you are subject to a residency audit from New York
- Filing amended returns or negotiating settlements if necessary
- Contesting any back tax and penalty assessments that have been levied against you
Residency audits can be very technical and fact-specific. You must come up with evidence that shows where you spent your time in recent years. Otherwise, you could end up with an unwanted tax bill, which includes penalties and interest.
Contact a New York Tax Attorney Today
Whether you need help with planning for residency purposes, or you have a specific issue with the New York State Department of Taxation and Finance, you need help from a tax lawyer. To learn more about how you can either be proactive or how you can defend yourself in an audit, speak to a New York tax attorney at Thorgood Law Firm today. We have a deep knowledge of New York tax law and how it is applied.
You can schedule a free initial consultation by filling out an online contact form or by calling us today at (212) 490–0704. Do not wait until you have tax issues to get legal help.
