How to declare a residency change

While 1834 doesn’t have a stance overall on what is best for clients, it’s important to know a variety of criteria typically needs to be met to declare a residency change from a financial and tax standpoint.

What’s needed?

Each state is a little different in how they determine if you’re a resident or not. For example, Minnesota’s Department of Revenue has more than two dozen factors it uses to determine where you live. Some of those that come up in conversation with our clients most often are:

• Location of employment.
• Location of former and newly acquired living quarters, whether owned or rented.
• Ownership of other real estate.
• Percentage of time physically present in a state vs. percentage of time physically present in other jurisdictions.
• Location of business relationships.
• Location of bank accounts and other financial institutions.

“If you truly intend to move to a new state, you will have no trouble satisfying these requirements,” said Jeanne Krigbaum, Chief Wealth Planning Officer at 1834, a division of Old National Bank. “If you plan to retain property in your former state of residence and continue spending time there, that’s when it becomes important to understand any state-specific requirements, so you aren’t surprised at tax time.”

Review before making a change.

If warm weather and low taxes were the only factors to consider when deciding to move, few people would live in northern states. There are intangibles that often are important to consider. Social and religious circles, family, health care and culture are just a few of the components to think about.

The term “six months and a day” for residency is too simplistic. Sound financial sense is important, but it’s not the only issue to consider. The timing of a move may matter as well. For example, if you’re close to selling a business and thinking about moving to a different state, we advise talking to your financial team prior to any actions. If you’re working or retired can make a difference too.

As always, if you have questions, please reach out to an 1834 team member.