Congratulations!
You’ve made the exciting decision to rent or buy a place in Florida and enjoy a new lifestyle—whether part-time or full-time. As someone who’s experienced it firsthand, I can assure you: you’re going to love it.
Are You a Snowbird?
Now comes the important question: Will you become a full-time Florida resident, or continue to split your time between states?
If you currently reside part of the year in a high-income tax state such as New York, New Jersey, Connecticut, Massachusetts, or Illinois—and winter in Florida, you could save significantly by establishing Florida as your permanent domicile. With no state income tax, Florida offers the potential to save thousands of dollars each year but only if you meet the legal requirements.
Understanding the concept of domicile is essential. Domicile is your primary, legal residence, the place you always return to and where the majority of your life takes place. If you’re still working (even part-time) or are a high-net-worth individual or couple, the financial and lifestyle advantages of becoming a Florida resident can be substantial.
Be Prepared for Pushback
Even after moving to Florida, many high-income individuals are surprised to find they may still owe taxes to their former state, especially if they haven’t fully established domicile in Florida.
A common misconception is that spending 183 days or more in Florida is enough to qualify. It’s not. Without taking the right legal and practical steps, you could face a state audit and possibly be required to pay thousands, even tens of thousands, in back taxes. States like New York have particularly aggressive audit procedures and are known for challenging the legitimacy of out-of-state moves.
The 183-Day Rule—What It Really Means
Spending more than 183 days (six months plus one day) in Florida is just one factor among many. To be considered a legal Florida resident and avoid tax obligations elsewhere, you must also demonstrate a clear intent to make Florida your permanent home.
Simply owning or renting a property in Florida isn’t enough, especially if you travel frequently for business or leisure. In an audit, the burden of proof is on you to provide documentation and evidence that Florida is your true domicile.
How to Prove Residency in Florida
If you retain homes in multiple states and want to claim Florida as your permanent residence, here are steps you should take as soon as possible:
- Make sure your Florida home is suitable for year-round living, not just seasonal use.
- Update your mailing address at the local Florida post office.
- Have all financial and legal correspondence—bills, bank statements, etc.—sent to your Florida address.
- Obtain a Florida driver’s license and register your vehicles in the state.
- Register to vote in Florida.
- Close bank accounts in your old state and open accounts in Florida.
- Establish relationships with Florida-based professionals (doctors, CPA, attorney, broker).
- If applicable, sell or rent out your previous primary residence.
- Apply for the Florida Homestead Exemption by March 1 of the tax year.
- Join social, religious, or professional organizations in Florida.
- Keep a detailed record of how many days you spend in each state.
Additional Tips to Strengthen Your Case
To go a step further and avoid surprises:
1. Keep a Dated Travel Log:
Document your whereabouts daily. This can be vital in proving your physical presence in Florida during a residency audit.
2. File a Declaration of Domicile:
This legal document, filed with your Florida county clerk, formally states your intent to make Florida your primary residence.
3. Update Estate Planning Documents:
Revise your will, trusts, and power of attorney documents to reflect Florida as your state of residence and align with Florida laws.
4. Understand Property Tax Implications:
Review how becoming a Florida resident affects your property taxes in both states, especially if you maintain real estate outside Florida.
5. Watch for “Sticky State” Rules:
States like New York and California may aggressively challenge your departure. Understand their rules, and work with a tax advisor to sever ties properly.
Final Thoughts
Even after taking all of these steps, you may need to file in both states during your transition year, depending on each state’s definition of part-year versus full-year residency.
Bottom line: Speak with a qualified tax professional before making the move. Having all your legal, financial, and residency matters in order can save you from costly mistakes—and give you peace of mind in your new Florida home.
If you’d like to discuss your Florida investment strategy, call me on 561-869-6464 for a no-obligation consultation. Or visit www.saulsimon.com to learn more about estate planning and the Five Essential Steps to Retirement Planning.
Resourcefully yours,
Saul Simon Financial Group
Boca Raton Fl.
Saul M. Simon CFP®
561-869-6464
Live for today, plan for tomorrow.