BREAKING UP IS HARD TO DO: HOW TO CHANGE YOUR TAX RESIDENCY FROM NEW YORK
by Tim Noonan, Partner at Hodgson Russ with Benjamin Metzger, Partner and Director of Portfolio & Wealth Advisory at BBR Partners
January 2026
As interest in changing tax residency from New York continues to grow, we’ve partnered with attorney and residency expert Tim Noonan, to help explain the process. This article outlines two main residency tests—statutory residency and domicile—and describes the key factors used to determine domicile; your home, time spent, business ties, personal belongings, and family location. It also highlights the importance of thorough recordkeeping, as New York aggressively audits residency changes and professional guidance is advised.
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Thinking about getting out of New York City? Join the club. Between remote work now the new normal and concerns of higher tax rates with the new Mayor, we’re getting inundated with questions from clients about breaking New York City residency and moving somewhere else, whether it be to upstate New York, Connecticut or (of course) Florida. If you’re thinking about making a move, don’t rely on what you hear from your friends, and definitely not on your favorite AI resource. Instead, engage your trusted advisors to come up with a plan.
In this piece, we’ll help get you started with a quick overview of New York’s residency rules and an outline of what it takes to move successfully. While this article focuses exclusively on moves out of New York City, the same principles apply to many high-income tax states. Our team regularly evaluates multi-jurisdictional scenarios, so we understand the nuances across state lines.
WHO IS CONSIDERED A NEW YORK CITY RESIDENT?
New York City has two different tests for considering whether a taxpayer is a resident of the City. If you qualify under either of these tests, you are considered a resident and must file and pay taxes as a resident.
- The Day Count Test. This is a simple, objective test—commonly known as statutory residency – is the test more people are familiar with. Under the statutory residency test, you qualify as a New York City resident in any tax year where you both maintain a permanent place of abode in the City for more than 10 months and spend more than 183 full or part days there. But beware….this is not the only residency test!
- The Domicile Test. Even if you spend less than 184 days in New York City, you can still be taxed as a City resident under the domicile test. This is a subjective test, not based on objective rules or standards, but instead on where your permanent or primary home is located. And to change domicile, we look to the “leave and land” rule: the taxpayer must “leave” New York with the intention of not moving back, and “land” in the new state with the intention of living there on a permanent, or, at least, indefinite basis. The party asserting a change of domicile bears the burden of proving the move with clear and convincing evidence. This is a high standard, and in close cases, the taxpayer loses.
KEY ACTIONS TO TAKE WHEN CHANGING DOMICILE
When analyzing the location of someone’s domicile, the New York Tax Department will compare the individual’s ties to the prior domicile and new domicile under five primary factors. We’ll cover each factor and give you the keys to building your best case and preparing for an audit. Remember, it’s a balancing test: you don’t have to win every factor to win a change of domicile, but the balance of the factors do need to create a “clear and convincing” case.
- Home Factor. The first factor analyzes the size, value, and nature of use of a taxpayer’s homes in New York City and the location of the new domicile. Of course, the strongest thing you can do to win this factor is to eliminate your former primary residence in the City entirely. Most of our clients aren’t willing to do that, and that’s fine, although downsizing can help. Buying a home in the new location is better than renting, as it better evidences the permanence of the new home, but is not required. In New York changes in ownership don’t really matter, i.e., moving title into a trust or transferring it to family members isn’t going to move the needle. Instead, this factor focuses on how the home is used and who is using it.
- Time Factor. The second factor is typically the most important: the quantity and quality of time spent in your new domicile and in New York City before and after the move. We typically suggest that to win this factor, you must show a dramatic change in time, the time in your new domicile should be much greater than the time in your old domicile. A 2:1 ratio of days in the new place vs. days in New York is the gold standard. But it’s not just about numbers; “quality” time in your new home is important as well. Tax auditors will also look at where you spend holidays, special occasions, etc.
- Business Factor. Next on the list is the “business factor,” which looks to the pattern of employment and compensation derived from that employment. It also examines the taxpayer’s active business involvement other than employment. Ongoing participation in decision-making and frequent communication with a business, even after official retirement, can be viewed as significant evidence of one’s domicile.
- Near and Dear Factor. The “near and dear” factor looks to the location of one’s financially valuable or sentimental possessions. We call this the ‘‘teddy bear’’ test, looking for the things it just wouldn’t be ‘‘home’’ without. Pets are often a deciding factor in an audit, so getting Rover licensed in the new state, set up with a vet, etc., can also be important.
- Family Factor. The last factor, the “family factor”, looks at the location of one’s spouse and minor children. Spouses are presumed to have the same domicile, so one spouse spending significantly less time than the other in the new place of domicile can be harmful.
OTHER CONSIDERATIONS
Notice that none of the five primary domicile factors consider voter registrations, driver’s licenses, mailing addresses, etc. These are factors that ChatGPT may say are critical, but they are more incidental than many realize. They include:
- the address at which bank statements, bills, and other family and business correspondence are received
- the physical location of safe deposit boxes
- the location of auto, boat, and airplane registrations and of the taxpayer’s driver’s or operator’s license
- voter registration, and where and when the taxpayer voted
- possession of a New York City parking tax exemption; telephone services and activity at each residence
- a taxpayer’s domicile declaration in legal documents such as a will and through property tax exemptions.
Although it is important that taxpayers who change their residence attend to all these , generally they aren’t the types of things that are determinative in a residency audit. We like to think of these factors as defensive in nature; helpful to back up our residency position, but not enough to carry the day.
RECORDKEEPING SUGGESTIONS
A final tip: keeping track of your time is critical. You will be required to prove your location on a day-by-day basis before and after the move. We’ve outlined some suggestions and best practices:
- Cell phone data is key. Your cell provider should maintain call-by-call logs with origination details. However, these may not be available indefinitely, so you should request these statements on an annual basis (i.e., make the request in early January for the previous year’s statements). AT&T and Verizon are best for this purpose. T-Mobile, not as much—they only keep data for two years.
- Use a smart-phone app to track your day-to-day location (Monaeo, Domicile365, TaxBird, Tax Day).
- Keep detailed and contemporaneous calendars of your appointments and locations on any particular day and print out your calendar on a monthly basis with the “print date” on the bottom of the page.
- Keep all travel documentation, including airfare, tickets, etc. If you are keeping a vehicle in NY, use E-ZPass, and if anyone has access to the E-ZPass that is in your name, change this right away and obtain tags for them in their own name. TX has its own statewide E-ZPass system, called TxDOT, which you should get for any vehicle you have there.
- Keep copies of your credit card statements. If anyone has a card in your name, get them their own card or use American Express. AmEx segregates charges by cardholder name on statements while other credit card companies bundle all charges together.
EXPECT AN AUDIT!
The New York tax department has the most sophisticated and aggressive residency audit program in the country. Our advice, be prepared. Partner with your advisors to create and execute a plan that will survive an audit. This way, when you hear from NY’s tax department, you have a plan and a team in place to navigate what otherwise could be a lengthy and painful process.
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Timothy P. Noonan is a Partner and attorney at Hodgson Russ, where he leads the firm’s Tax Residency Practice. With over 25 years of experience, Tim has handled thousands of New York State and City tax audits and more than 100 cases before the Division of Tax Appeals. Tim earned his law degree from SUNY Buffalo Law School.
Benjamin S. Metzger is a Partner and Director of Portfolio & Wealth Advisory and Head of BBR Southeast. Benjamin works with clients to develop an overall financial strategy, managing their investments, and executing their wealth management plans. Benjamin holds an MSc from the London School of Economics and a BSc from Manchester Business School at the University of Manchester. He resides in Southeast Florida.
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