New York State Tax authorities have begun to crack down more rigorously on residency and tax audits as Mayor Mamdani tries to push through a new plan for a wealth tax to raise more revenue. They are targeting high-income taxpayers who are trying to evade New York taxes by moving to low-tax states like Florida. Experts point out that despite the commonly used “six months plus one day rule” to determine taxpayers’ residency status, New York State’s criteria for determining residency are stricter than many people realize.
Many residents planning to leave New York believe that staying in the state for less than 184 days in a year could prevent them from being considered New York taxpayers. However, multiple tax lawyers and accountants emphasize that a key factor in New York State tax law is establishing “domicile”, not merely the number of days stayed. To successfully change domicile, taxpayers must provide substantial evidence demonstrating that they have established a true life center in the new state, such as updating driver’s licenses and voter registration addresses, moving personal belongings to the new home, and arranging family and spousal living situations.
Tax lawyers state that New York State is highly aggressive in collecting income taxes and is not pleased to see people leave, going to great lengths to pull you back into New York’s tax net. Changing domicile is not something that can be done overnight; it requires concrete and comprehensive evidence of a lifestyle transition.
During audits, tax authorities investigate whether individuals still maintain social, business, and core family activities in New York, including the actual location of schools their children attend, whether their bank accounts and mailing addresses are still in New York, and other factors.
With Mamdani proposing a new 2% wealth tax (expected to subject high-income earners to as much as 16.8% in state and local income taxes before federal taxes are taken into account), some tax experts suggest that an increased tax burden may lead to more scrutiny by the state tax department to prevent tax base erosion.
Furthermore, New York State implements the “convenience of the employer rule,” stipulating that if an employer’s headquarters are in New York State, remote workers may be required to pay taxes to New York State regardless of where they live. Just one visit to the company office by a remote worker, such as for a holiday gathering, could trigger tax obligations.
In recent years, the trend of population outflow from New York State has been very apparent, with an average of one resident leaving every 2 minutes and 23 seconds. The conservative think tank Empire Center points out that the percentage of millionaires in New York has dropped from 12.7% in 2010 to 8.7% in 2022, indicating that high-income earners have been moving out. Another report released by the Citizen Budget Commission shows that between 2018 and 2022, over 125,000 New York residents moved to Florida, taking nearly $14 billion in taxable income with them.