Moving out of NY
I have a client moving out of NY to tax-free TN this year. TN will be her full-time domicile but she’s moving after June 30th. If she takes an IRA (or qual plan) distribution after she moves to TN, would she need to pay NY income tax on the distribution?
Thanks !
Permalink Submitted by Alan - IRA critic on Fri, 2019-03-22 21:44
She should delay the distribution until she has established a TN domicile using as many of the following indicators as possible. That involves having the TN address on all accounts, registered to vote in TN, re registered vehicles in TN, surrendered NY DL and secured TN DL, fully vacate NY residence, establish bank account in TN etc. Do not leave any sign that she might return to NYS. She will eventually file a part year NYS income tax return for 2019. It should be marked “final” and show TN address on it. Even if the TN domicile is well documented, she must also deal with the 183 day test separately. If she has a “permanent place of abode” anywhere in the state (such as a room in a relative’s home), her entire income will be taxable to NY despite having established domicile in TN. Therefore, it is imperative to vacate any such places ASAP. NY is highly sensitive to taxpayers moving out and have been dealing with this for decades. In many cases they are very aggressive in attempting to extract tax revenue. She should document everything possible with specific dates. Her IRA distribution should be delayed until as many of these things are completed as possible. She might also look into whether the 20k retirement distribution exclusion will apply if the distribution is somehow tagged as NY Taxable income.
Permalink Submitted by Michael Frontera on Wed, 2019-03-27 16:00
Thank you very much for the detailed response and great insight.
Permalink Submitted by Richard Rea on Thu, 2019-04-04 00:08
Counciled a few on moving to a no sate income tax state in the past wish I had this write up then.
Permalink Submitted by Richard Rea on Wed, 2019-04-03 23:44
Hear a snipet on business TV that at the current rate TEXXAS will have more millionairs than New York in 2 or 3 years. One rule I have is NEVER live in a state with an income tax.