Yeah that’s a lot of nuisance for a completely ordinary thing that happens all the time. I could see if you didn’t file a CT return the following year, but sheesh. Probably around 25% of all moves will happen between the end of the year and when the tax return is filed.
Starting in 2021 we are supposed to indicate in the tax software if the taxpayer’s address changed since last year’s return was filed, and if so, when. There’s no errors generated if we leave it blank, but I’m guessing that if the fields are populated this information somehow attaches to the e-file. That wasn’t something that was part of the software package in 2020 or earlier.
That said, I don’t see it on the 1040. But some stuff that’s not on the 1040 is part of the e-file, so this might be another one.
I wonder if you’d moved on April 1, 2022 and indicated the date of move on your e-filed 2021 return, if Connecticut would’ve given you the same hassle.
In the Before Times, I was shuttling among three different locations. The convenience rule would have meant that my home state would have had a claim to tax income earned while I was out of state…but I was out of state enough that I could have had a claim to part-year residency.
Ultimately common sense prevailed. The cost-savings wouldn’t have been worth the effort.
Yeah I worked for a few weeks in a state that doesn’t have state income tax at all. Sounds like it doesn’t matter and I just pay ny state tax that entire time anyway.
Ah, yes, if you’re a legit part-year resident then that’s different. You must live or work in a state before it can tax your income. They CAN use out-of-state income for part-year and nonresidents to ratchet you up into the correct tax bracket if they have a graduated tax rate. But they can’t actually tax the income from the other state if you were not a resident when you earned it.
But if you have a home base in one state and frequently travel out of it that doesn’t necessarily make you a part-year resident.
Tests that the states look at for determining residency (in no particular order):
Where do you go when you are not working?
Where are you registered to vote?
Where is your car registered?
Where do your spouse and minor children live?
Where do your minor children attend school?
What sort of residency have you established in the new state?
Probably some others I’m forgetting.
You could easily be a resident of State A and spend more than 50% of your time in State B. But if you maintain a home in State A and that’s where your wife & kids live and your car is registered in A and you go to your home in A when not working and you stay in a hotel that your employer pays for in State B then you are definitely not a resident of State B.
But if you own homes in two states and WFH from both of them, NOW it’s a lot murkier. (See: Dick Cheney, Mitt Romney, among others)
You’d have a much stronger case if you switched your driver’s license, vehicle registration and voter registration to the lower-tax state though.
Now if you lived in the no-tax state and only sometimes worked in New York then you’d only have to pay NY tax when you’re actually working in NY, although they do have some weird rules about if you’re in New York but not working in New York then it still counts sometimes… rules I’m dimly aware of but not an expert on. (Like if you live in Florida and work in New Jersey one particular day but then go into Manhattan to take in a Broadway show after work then NY might have a claim to tax your New Jersey income if certain conditions are met.)
Certainly when the SOA or CAS has a conference in NYC we non-New Yorkers are all supposed to be paying NY tax for those days we’re at the conference, but probably none of us do unless we have other material NY income.
But industries regulated but the DOT (truck drivers, flight crews, probably a few others) have special rules. They are working out of their base. So an Atlanta-based Delta pilot who also lives in Georgia is not subject to NY tax just because he flies into JFK or LGA. One of my step-brothers is a long-haul truck driver but he only pays tax to one state despite driving through four states twice a week.
Really? People travel in and out of new york for business constantly. That would be a nuisance for them all to have to file new york state income taxes.
Yeah, I believe that’s correct and is uniquely a NY thing. If the conference is in San Francisco I don’t think California tries to tax the income. I recall Bruce discussing this on AO but alas, those posts are lost.
And the IRS doesn’t care whether you worked in Michigan or Florida. It’s Michigan and Florida that care. If you stay under the radar in one of those states, and your employer doesn’t report your location to them, you’ll probably get away with it.
And if it’s just a couple of business calls during an actual vacation or something, I don’t think even the states care.
Yeah, they probably wouldn’t find out if it was a few phone calls on vacation. They might not even care if they did find out as that might be considered incidental.
The original example did specify “months” of working from Michigan (implication being full time) and implied that the Florida residence was a tax dodge.
They still may not find out, but at that point they would certainly care if they did find out.
Agree. And when people file unemployment or workers comp claims in states they have not been paying income tax to, it’s going to really come to a head.
Good to see some old faces here from the Actuarial Outpost frequent threads outside of those for exams. I know many of you are old farts who are already Fellows. Can’t wait to get to your levels.
Always appreciate the inputs and advice from you experienced folks
-Cheers
I thought the NY thing only applied if you worked at least 14 days in the state. But maybe that’s just the minimum for your employer withholding NY taxes, not the minimum for you actually owing them.
