What You Need to Know
To Avoid an Unexpected State Tax Liability
Today, taxpayers may have multiple residencies for a host of reasons. An example could be a “snowbird” . . . a PA resident who lives in FL during the winter months to soothe those aching bones during the chilly winter months. This person is a resident of both PA and FL. Another example could be where the PA resident decides that for state tax-savings reasons that they want to show their primary residency as being in FL which does not have a personal income tax versus PA which has a 3.07% personal income tax rate.
We recently met a taxpayer who maintained their PA home but decided to call their FL winter home their primary residence to save state income taxes. The PA Department of Revenue (DOR) assessed the taxpayer’s income earned as if he had resided in PA, despite the fact that he relocated to FL, had a FL driver’s license, voted in FL and attended church and social groups in both PA and FL. He had unsuccessfully attempted to persuade PA that he was not subject to PA’s personal income tax, but his arguments fell on death ears. This is when he requested a consultation with us.
The important factor [Read more…] about MULTI-STATE RESIDENCY