In the two years since the outset of the COVID-19 pandemic, there has been a mass exodus of New Yorkers leaving the Empire State for warmer, more tax-friendly states such as Florida and Texas.
In fact, New York ranked third among states in which people moved from in 2021. More than 33,500 New Yorkers moved to Florida between September 2020 and July 2021 alone, according to the Florida Department of Highway Safety and Motor Vehicles.
The New York State Department of Taxation and Finance (“Department”) likely recognized these developments, which prompted changes to its Nonresident Audit Guidelines (the “Guidelines”). In December 2021, the Department revised the Guidelines for the first time since June 2014. The Guidelines may affect whether a person moving out of New York will be considered a New York statutory resident for tax purposes.
In general, a person is deemed to be a New York statutory resident if the person:
• maintains a permanent place of abode in New York State; and
• spends more than 183 days of the year in New York State.
For statutory residency purposes, a person maintains a permanent place of abode (a home or other residence) in New York State if that person retains such abode for “substantially all of the taxable year.”
The previous Guidelines provided that “substantially all of the taxable year” meant 11 months. The December 2021 Guidelines provide that “substantially all of the taxable year” means ten months.
The upshot is that a person who wishes to sell a New York home and move elsewhere has one fewer month to do so before they are considered a New York statutory resident for tax purposes in that year.
Contrary to the old Guidelines in which a person could have sold a New York home in November or December of a given year and established statutory residency in another state for tax purposes in that year, under the new Guidelines, a person must sell the New York home before the end of October.
If you are thinking about moving out of New York in the near future, or have done so in the recent past, it is important to be aware of this recent development so that you may plan accordingly.
Michael Salad is a partner in Cooper Levenson’s Business & Tax practice group. He concentrates his practice on estate planning, business transactions, mergers and acquisitions, tax matters and probate administration. Michael holds an LL.M. in Estate Planning and Elder Law and is licensed to practice law in Florida, New Jersey, New York, Pennsylvania, Maryland, Connecticut and the District of Columbia. Michael may be reached at (954) 889-1850 or via e-mail at firstname.lastname@example.org.
Steven Land is an associate in Cooper Levenson’s Business & Tax practice group in its Atlantic City office. He concentrates his practice on estate planning, business transactions, mergers and acquisitions, and tax matters. Steven may be reached at (609) 572-7530 or via e-mail at email@example.com.
 https://www.news10.com/news/ny-news/report-new-york-among-top-states-people-moved-away-from-in-2021/ https://www.move.org/moving-stats-facts/ https://abc7ny.com/new-york-to-florida-pandemic-moving-delta-variant-covid/10901991/ State of N.Y. – Dep’t of Tax’n and Fin. Income Franchise Field Audit Bureau, Nonresident Audit Guidelines (2021). State of N.Y. Nonresident Audit Guidelines (2014).