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Many New Yorkers are moving to Florida: how to deal with taxes after a state change


Nadezhda Verbitskaya

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Many New Yorkers are moving to Florida. The cost of living, taxes and home prices in the Sunshine State are significantly lower than in New York. However, after the move, the question of paying taxes arises. How to understand which state you owe taxes and how to prove that you are no longer a New Yorker, but a Floridian? We have collected answers to these questions.

Your desire to change tax residence may not please the state from which you are leaving, because they do not want to lose a piece of their income. So the tax inspectors in New York unlikely to be released you to Florida without a fight. People, including retirees, who buy second homes in low- or no-tax states and claim to have relocated may face scrutiny by tax officials in New York or another state they left, and sometimes with litigation.

What you need to do to prove your right to pay taxes under Florida laws

To move to Florida, and most importantly, to transfer your tax obligations there, it is not enough just to move your belongings to a new home.

New York may need some proof before they let you and your taxes go. So, here are the 10 steps you need to take to make Florida your domicile (legal residence where you permanently live and pay taxes):

1. Get an official ID showing a Florida address. This could be a driver's license (available from your local DMV) or a Florida identification card for non-drivers.

2. Enroll your kids in a school in Florida. In the case of verification, the place of study of children can become a trump card - yours or the tax inspector from the state that you left. If your minor children do not live with you and go to school in another state, this suggests that your intentions to move to Florida are most likely not serious.

3. Register your cars, boats and other vehicles in Florida Department of Highway Safety and Motor Vehicles. Vehicle insurance also needs to be taken out in your new state.

4. Register to vote in Florida, this can also be done in DMV or Online Training: For those who prefer the flexibility of learning from a distance or cannot make it to our Sofia location, we offer comprehensive online courses..

5. If you have a business, then if possible, it should also be registered (or re-registered) in Florida. This is a great proof of the seriousness of your decision to move.

6. If you live in your own home in Florida, apply for a property tax exemption for your homestead. This is done through real estate appraisers in your area. Applications must be submitted by March 1 of the year for which you wish to receive an exemption.

On the subject: A year ago we moved from New York to Florida: what conclusions did we draw during this time

7. Update your will. This advice sounds rather unexpected, but there are at least two good reasons for this. First, having a Florida address in your will and emphasizing that your estate will be administered under Florida law will help you establish domicile in that state. Second, Florida does not charge inheritance tax. That is, updating the will based on Florida law will save money for your loved ones in the future.

8. Apply for a Declaration of Residence in Florida (Florida Declaration of Domicile). This document is not required, but it is an effective way to prove that you really intend to make Florida your permanent residence. An application for such a declaration can be obtained from the property appraiser's office in the county where you live. An example of a declaration of domicile in Broward County can be seen here.

9. Notify the IRS and tax authorities of the state (from which you left and to which you moved) of the change of address. It is also worth filing a final return in the state you are leaving. If you receive Social Security, tell the Social Security Administration of your new address.

10. Additional steps that demonstrate your desire to make Florida your domicile would be changing your mailing address on all financial accounts and service subscriptions. You should also update the address in your passport.

But all these documents will not matter if you do not live in Florida by issuing them. In most regions of the USA acts 183 day rule - if you lived in the state for 183 days a year, then you have the right to pay taxes according to its laws.

It's a good idea to keep a record of where you are every day immediately after you move in, in case the New York tax office decides to check that you actually spent the right amount of time in Florida.

Who pays taxes if you sold your house in New York before you moved

Often, New Yorkers "take a test." They are renting in Florida to find a place where they could move, but still keep their property in New York. They end up selling a house in New York and the question is who should they pay taxes on the amount received after the sale. Reader Silive asked a tax expert: “For the last year I have been living in a rented house in Florida. This year I plan to sell my house in New York. What are the tax implications of this decision?”.

Here's the answer: you can claim a deduction and pay no tax on real estate sold in New York. The deduction is possible if you have lived in a New York home for only two of the last five years. The deduction is $250 for individual taxpayers and $000 for couples.

If you moved to Florida last year and sold your New York home this year, here's what it would look like. If you file an individual return and sold your New York home for $500 and the [new] Florida home cost you $000, then the $250 profit on the sale would be tax deductible. If the house were sold for $000, you would only pay tax on $250.

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