Changing your state of residence

When moving to a new state, you may have to sever some or all of your ties to your former state; half measures can leave you open to tax claims by your former home state.

You really have to leave

Many states, especially those that levy a state income tax, are very active in challenging claims by former residents that they have moved out of state and changed their tax domicile. These states may attempt to use any tie that a former resident maintains with them to justify their continuing to tax the former resident.

In order for your move to be respected, you really have to move—half-measures could leave you open to claims by your former home state that it should still be able to tax you. You also have to establish domicile in a new state; being absent from your former home state isn’t enough. Domicile for tax purposes is a matter of intent; that intent is implied by your actions.

How do you leave?

Changing your residence is a legal matter, so you should contact your independent legal and tax advisors before undertaking any action. What follows is a checklist of items to consider. Although there’s no bright-line rule, the more of these you fulfill, the more likely it is that you will be deemed to have changed your residence for tax purposes.

• Change your driver’s license to your new state and cancel your old state’s driver’s license
• Register your car in your new state and notify your insurance company of the change
• Register to vote in your new state and cancel your old state’s registration
• Move your religious affiliation and membership to a local group or house of worship in your new state; make local contributions
• Buy a home in your new state—and if possible, sell your home in your old state (or transfer it to family members or other entities); if you can’t buy right away, rent with a long term lease
• Claim a homestead exemption in your new state (if applicable), and relinquish any homestead claim in your old state
• Revise your estate planning documents (wills, trusts, powers of attorney, health care powers of attorney. advance care directives, etc.) to recite your new state, and use your new state’s forms
• Change your bank accounts to your new state and don’t retain bank accounts in your former state
• Move your safe deposit box to your new state
• Obtain a library card in your new state
• Change social clubs and service clubs (e.g., Rotary, Kiwanis, golf club, etc.) to your new state; serve on local charitable boards
• Engage local medical professionals; send your medical records to them
• Change your address with the IRS—list your new address on your returns
• Notify vendors (credit cards, brokerage, etc.) of your new address
• Generally, focus your activity (economic, social, financial) in your new state

Be careful with your timing

As a general rule, you want to stay out of your former state more than 183 days in each calendar year, although this number may vary by state. The closer you are to the threshold, the more likely your former state will want you to prove that you were outside of that state for more than 183 days. Keep a daily calendar (with receipts, if possible) showing that you were outside your former state for each day. In the first year you claim non-resident status in your former state, you may be more likely to experience a residency audit than in future years, regardless of how close you are to the threshold.

Although you don’t have to be in your new state for more than 183 days, your former state will look at how many days you spent in your new state as one factor in determining whether you have established residency in the new state.

Contact your J.P. Morgan Advisor to discuss any plans you have to move to a new home state.

Important Information

This material is for information purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). The views and strategies described in the material may not be suitable for all investors and are subject to investment risks. Please read all Important Information. 

GENERAL RISKS & CONSIDERATIONS. Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan representative. 

NON-RELIANCE. Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events. 

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions. 

Legal Entity and Regulatory Information. 

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment advisor, member FINRA and SIPC. Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

This document may provide information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC (“JPMS”). The agreements entered into with JPMS, and corresponding disclosures provided with respect to the different products and services provided by JPMS (including our Form ADV disclosure brochure, if and when applicable), contain important information about the capacity in which we will be acting. You should read them all carefully. We encourage clients to speak to their JPMS representative regarding the nature of the products and services and to ask any questions they may have about the difference between brokerage and investment advisory services, including the obligation to disclose conflicts of interests and to act in the best interests of our clients.

J.P. Morgan may hold a position for itself or our other clients which may not be consistent with the information, opinions, estimates, investment strategies or views expressed in this document.  JPMorgan Chase & Co. or its affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer. 

© 2022 JPMorgan Chase & Co. All rights reserved