There may be many factors that go into your decision as to when and where you will establish residence in a new state; these include: work, health, family, climate, taxes etc. Once you have made your decision, it is important to follow through properly if associated income and/or estate tax aspects are to apply.

As the baby boomers retire and move to make way for the millennials, where you decide to live can significantly change your tax effects, but only if you properly establish your residence and make it effective. This is also true if you’re still working and dealing with a company transfer to another location.

Once you’ve considered all the factors influencing your decision, left the old home and are now looking to start that retirement or job in a new state, here are the proactive things you should undertake to make sure you have established your new residence and accomplished your desired outcome:

  • Register to vote in the new location.
  • File a change of address form with the post office at the old location and change the address on documents such as tax returns, wills, contracts, insurance policies, passports and living trust agreements.
  • Obtain a driver’s license and register automobiles in the new location.
  • Open and use bank accounts in the new location.
  • Move items from safe-deposit boxes in the old location to the new location.
  • Purchase or lease a residence in the new state. Sell residence in the old state or rent it at FMV to an unrelated party.
  • If an income tax return is required, file a resident return in the new state and a nonresident return (or no return, if appropriate) in the old state.
  • File for property tax relief under a homestead exemption (if any) in the new state. If retaining a home in the old state, move any homestead exemption applicable to that property trophies, collections, furniture, etc. to the new state.
  • Move all items that make a house a home such as mementos, heirlooms and sentimental pieces.
  • If still working, check your payroll information for the correct change in tax withholding at both the state and local tax level.

The more steps you take to establish domicile in your new state, the more likely you will have no issues in claiming that all ties to your old state are broken. If you have any questions, please contact your GBQ tax advisor.

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