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By: Mark J. Stegman 

We are often asked what must be done to establish residency in a state other than Illinois to a state (e.g. Florida) with tax environments more favorable to the taxpayer. There are many actions that may be taken to fortify the position that the taxpayer has changed his/her residence from Illinois to Florida for tax purposes. These same actions would generally apply to any taxpayer who wants to change their residence from his or her current state of domicile to a different state.

In some states, including Illinois, there is a presumption of residency if an individual spends more than nine months of the year in that state. Additionally, some states closely scrutinize an individual’s spouse who remains a resident of one state, while the individual claims to be a resident of a different state. As a result, there have been cases in which an individual’s state of residence has been murky and two states have argued that a person was a resident and consequently subject to tax. The greater number of the recommended actions that are taken will serve to limit any potential dispute as to the taxpayer’s state of residence for income tax or potential estate tax issues.

Checklist

Below is a checklist of the recommended actions required in order to establish residency in another state using Florida as an example. Some actions may differ depending upon the state in which you are trying to establish residency.

  • File a formal Declaration of Domicile in the Office of the Circuit Clerk of the Circuit Court for the county in which the taxpayer intends to reside.
  • Apply for a homestead exemption from Florida property taxes.
  • Pay utilities at the Florida property.
  • Register dependent children, if any, for schools in Florida.
  • Register to vote in Florida and have yourself stricken from Illinois voting records.
  • Register car in Florida (i.e., get Florida license plates.)
  • Obtain a Florida driver’s license.
  • Move personal bank accounts to Florida banks; for accounts held outside of Illinois; have the mailing address changed to the Florida address.
  • Remove contents from Illinois safety deposit boxes and put the contents in safety deposit boxes at Florida banks.
  • If you have any Illinois state licenses (e.g., fishing, hunting, boating, etc.), do not maintain them and notify the relevant agencies of the change of residency. Apply for similar licenses in Florida.
  • Terminate Illinois club memberships (e.g., country club memberships), especially those for which Illinois residency is required, or change Illinois club memberships to “nonresident” memberships when possible; apply for similar club memberships in Florida, especially those for which Florida residency is required.
  • Change religious affiliations to terminate membership in Illinois organizations and establish membership with Florida organizations.
  • Establish relationships with pharmacy and medical providers in Florida.
  • When staying at a hotel, register using a Florida address.
  • In any formal document where the taxpayer’s residence is recited, recite Florida as the state of residence.
  • Change the address set forth in the following to the Florida address:
    (1) Federal income tax returns (and file income tax returns as a resident of Florida).
    (2) Billing address for credit cards.
    (3) Billing address for cellular phone (and do not pay for an Illinois landline unless necessary; apply for Florida landline if necessary).
    (4) Insurance policies (e.g., medical insurance, life insurance, etc.).
    (5) Filings with Social Security Administration.
    (6) Corporations in which the taxpayer holds stock (notify the corporation of the change of residence and have securities registered in the taxpayer’s name   at the Florida address).
    (7) Passport.
    (8) Any documents necessary so that income, pension, dividend, and interest checks, as well as other payments, are sent to the Florida address.
    (9) Brokerage account statements.

Download a printable version of this checklist here.

Professional Services Disclaimer: Please note that the information presented here is as an educational service, and while it contains information about legal issues, it is not legal advice. No warranty is made regarding the applicability of the information presented to a particular client situation, and the information set forth is not a substitute for original legal research, analysis and drafting for a particular client situation.