New York eliminates temporary stay residency exception.

• Author: Weintraub, Sanford

New York is very aggressive in making sure that those who work or live in the state pay their fair share of taxes. Taxpayers who are nonresidents of New York pay taxes only on their share of New York source income; however, taxpayers who are state residents pay taxes on their worldwide income. Because falling under the definition of a New York resident can be very expensive, it is extremely important to understand the rules.

Although much has been written about the change of residency when retiring to another state, a recent change in the New York regulations dealing with the temporary assignment rules will affect workers coming into New York.

Resident Individual Defined New York defines a resident individual as either:

* A domiciled resident--a New York person domiciled in New York (subject to exceptions not here relevant); or

* A statutory resident--a New York individual (other than an individual in active service in the U.S. Armed Forces)

who is not domiciled in New York but who maintains a permanent place of abode in New York and physically spends in the aggregate more than 183 days of the tax year in New York (20 NYCRR [section] 105.20(a)).

A person is deemed domiciled in a place where the individual intends to make his or her permanent home--the place to which that individual intends to return whenever he or she may be away.

A permanent place of abode is a dwelling place suitable for year-round use, containing ordinary dwelling facilities for cooking, bathing, etc., that the taxpayer maintains but need not own. The term also usually includes a dwelling owned or leased by the taxpayer's spouse. It does not include camps or cottages that are suitable and used only for vacations, or barracks or other construction that do not contain facilities ordinarily found in a dwelling (20 NYCRR ~105.20(e)). Therefore, a summer home is not a permanent residence unless it is suitable for year-round habitation. New York regulations provide that a New York nondomiciliary must maintain a permanent place of abode for substantially all of the tax year in order to be taxed as a statutory resident, and New York interprets that to mean a period exceeding 11 months.

Temporary Stay Exception

Historically, New York provided a special "temporary stay exception" to the permanent place of abode rule by providing that a place of abode was not deemed permanent if it was maintained only during a temporary stay. Although New York defined a temporary stay as generally...