Tax Residency vs. Domicile - Filing in Two States During Relocation

This is a common situation with job relocations, so don't worry too much. When you have ties to multiple states, it comes down to understanding the difference between statutory residency (the 183-day rule) and domicile (your permanent home). Your domicile is where you intend to make your permanent home - it's based on your actions and intentions rather than just time spent. Factors include where your family lives, where you're registered to vote, where your cars are registered, where you have bank accounts, etc. For the first part of 2025, your wife will likely be a domiciliary resident of your current state BUT could also be considered a statutory resident of the new state if she's there 183+ days and maintains living quarters. This means she could be a tax resident of BOTH states for part of the year. Most states have tax credits for taxes paid to other states to prevent double taxation on the same income. When your wife files her returns, she'll likely need to file: 1. A part-year resident return for your current state (until you both establish domicile in the new state) 2. A resident return for the new state (since she'll be there 183+ days with living quarters) The good news is that for W-2 income, it's usually taxed where it's earned, and the credits should prevent double taxation on the same income.

I went through something similar last year and found taxr.ai super helpful for sorting through my multi-state tax situation. I was moving from Illinois to Texas mid-year and wasn't sure how to handle my residency status since I was going back and forth a lot during the transition. I uploaded my W-2s and some documents about my living situation to https://taxr.ai and it analyzed everything to show exactly how to file in both states. The system identified which income was taxable where and gave me specific guidance for my situation. It was much clearer than what my accountant initially told me (who was just guessing, honestly). The best part was that it caught a mistake I would have made with my rental property income that would have been taxed twice. Definitely worth checking out if you're dealing with complex state residency questions.

I want to follow up about my experience with taxr.ai since I decided to try it after my initial skepticism. I'm genuinely impressed by how it handled my complex situation with stock options that vested while I was working across state lines. The system correctly identified that my options should be allocated based on where I performed the services during the vesting period, not just where I lived when they vested. This was a nuance my previous accountant missed, and it saved me from paying double tax on about $40,000 of income. The document analysis was particularly helpful - I uploaded my relocation agreement, temporary housing lease, and stock plan documents, and it extracted the relevant dates and details to create a precise timeline of my residency status. Definitely more thorough than I expected!

If you're having trouble getting answers from state tax departments (which happens A LOT with complex residency questions), I recommend Claimyr. I was stuck in a similar situation with conflicting advice about my domicile status after taking a temporary work assignment. I tried calling both state tax departments directly but couldn't get through to anyone knowledgeable after several attempts. Used https://claimyr.com to get through to an actual tax specialist at my former state's department of revenue in about 20 minutes instead of the usual 2+ hour wait. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed that I needed to file as a part-year resident in both states and explained exactly how to allocate different types of income. They even emailed me the specific forms and instructions I needed. Made a huge difference in my confidence about how to handle the situation.

I need to admit I was completely wrong about Claimyr. After expressing skepticism, I decided to try it myself because I was desperate to resolve my California/Arizona residency question. The service actually connected me to a California FTB representative in 35 minutes when I'd been trying for over two weeks on my own with no success. The agent I spoke with gave me specific guidance on how to document my domicile change and explained which forms I needed for my part-year residency filing. What really surprised me was how the agent spent almost 20 minutes going through my specific situation - something that never would have happened if I'd finally gotten through on my own, as they usually rush you off the phone. Having official guidance directly from the tax authority was worth every penny for the peace of mind alone.

When I moved mid-year from New York to Florida for work, I found that getting a new driver's license in my new state ASAP was really important for establishing domicile. The date on that license was actually used by New York to determine when my domicile officially changed. Also, keep a detailed log of where your wife is physically present each day of the year. Some states are SUPER aggressive about auditing the 183-day rule, especially if you're coming from or going to a higher-tax state. My cousin got audited by New York and they asked for cell phone records, credit card statements, toll receipts, and flight itineraries to verify her whereabouts.

Has anyone used TurboTax for filing taxes with a mid-year move between states? My husband and I will be in a similar situation next year (moving from Washington to Colorado) and I'm wondering if I need to pay for a CPA or if tax software can handle this.

This is exactly the kind of situation where keeping detailed records will be your best friend. I went through something similar when my company relocated me from Ohio to North Carolina mid-year. A few key things that helped me: 1. **Document everything with dates** - When your wife starts work, when you sell the house, when your daughter graduates, when you both physically move. These dates become crucial for determining part-year residency periods. 2. **Don't overthink the "choosing" resident vs non-resident** - You can actually file as a part-year resident in both states. Your wife would file as a part-year resident of your current state (January 1 through move date) and a part-year resident of the new state (move date through December 31). 3. **The domicile question resolves itself** - Right now you're worried about having ties to both states, but that's totally normal during a transition. Your domicile will clearly shift to the new state once you sell your home, move your daughter, and establish your primary residence there. 4. **Corporate housing considerations** - The temporary nature of your wife's corporate apartment might actually work in your favor for the domicile argument early in the year, since it's not a "permanent" residence. Your tax professional's advice sounds reasonable, but I'd recommend getting a second opinion from someone who specializes in multi-state returns if you're still feeling uncertain. The peace of mind is worth it for complex situations like this.