You may have seen my previous blog post about moving to a new state and establishing a new domicile there đ That is one hurdle to overcome when moving out of state đ„ Your former state may challenge that youâve established a domicile in your new state, which means an audit đ„ Once youâve cleared that hurdle, you need to continue to regularly track your presence and travels against the 183-Day Rule because, although youâve successfully established your new domicile, your former state may challenge how much time youâre spending there, whether youâre actually living there. And they can do this for years after youâve established your new domicile. [1]
A. No. There is a lot of mythology on the internet about the âsix-month presumption.â While itâs always better from a residency perspective to spend less time in California, spending more than 6 months in California does not make you a resident. In fact, no one thing will ever make you a resident. The test for legal residency is complex and involves many factors. You can spend more than 6 months in California without becoming a resident, but you should plan carefully to make sure an extended stay plus other contacts donât result in an audit or unfavorable residency determination. See our article, âThe Six-Month Presumption In California Residency Law: Not All Itâs Cracked Up To Beâ. (last edited 80 days ago by Kea Higginbotham from Luzhou, China) [2]
You donât have to be a tax lawyer to know that the way to avoid becoming a resident of California is to spend less than six months in the state during any calendar year. Right? Well, not exactly. The âsix-month presumption,â as itâs called, which is mentioned in one form or another in almost every Google search result of California residency rules, isnât all that itâs cracked up to be. Thatâs not to say the amount of time spent in California doesnât play an important role in determining legal residency. Just the opposite. Itâs critical. But the real rule is more complex and has to be understood in the context of how California determines residency. It isnât by counting days. In fact, relying on the six-month figure as a magical way to avoid California residency can get a taxpayer in tax trouble. (modified by Adam Richardson from Uberlandia, Brazil on December 11, 2020) [3]
Palmspringstaxandtrustlawyers.com goes on to mention how out-of-state visitors who own vacation homes in California or otherwise spend significant time here on a seasonal basis (traditionally known as âsnowbirdsâ because the season is inevitably winter) are often anxious about their residency status. Thereâs good reason to be. California rules for determining residency are notoriously difficult to grasp. Itâs altogether possible for the innocent actions of a nonresident to trigger a residency audit. And sometimes the audit has a bad outcome, with tax consequences that bite. Letâs go over the basics of how California determines residency for tax purposes. They can be confusing, and sometimes brutal. (emended by Kee Doty on April 12, 2020) [4]
Article References
- https://blog.monaeo.com/the-183-day-rule-5-things-to-know-when-establishing-state-residency-and-fighting-audits
- https://www.palmspringstaxandtrustlawyers.com/frequently-asked-questions-california-residency-rules/
- https://www.palmspringstaxandtrustlawyers.com/six-month-presumption-california-residency-not-cracked/
- https://www.palmspringstaxandtrustlawyers.com/g-guidelines-for-determining-residency/