Question:

We are moving our primary residence from Massachusetts to Florida. In establishing required out-of-state days, how are days we’re in neither state counted? If we leave on a vacation from Massachusetts, will those days be counted as out of Massachusetts, or must we leave from Florida for those days to be attributed to our Florida residence?

Response:

As I understand your question, you are dividing your time between Massachusetts and Florida and would like to establish Florida as your residence in order to avoid Massachusetts income and estate taxes. Your question is how your vacation days outside of either state will count and whether the state you leave from on vacation affects how those days are counted.

The answer is that it could have a very marginal effect. Residence is not strictly a counting game—that spending 183 days every year in one state and 182 in the other means that you’re a resident of the first state and not the second. Instead, the tax authorities look at many factors to determine a pattern of residence, of which time is important. Factors in addition to time include voter registration, library registration, car registration, drivers licenses, where estate planning documents are prepared and signed, and the filing of income tax returns.

In terms of time spent in each state, if someone spent 182 days a year in Massachusetts, 169 in Florida, and 14 on vacation, but always left from Florida, Massachusetts would probably still argue they’re a Massachusetts resident. If, on the other hand, the same person spent 176 days a year in Florida, 175 in Massachusetts, and always left for vacation from Florida, that might help nudge the decision towards Florida.

All of this said, we’ve often seen Massachusetts residents retire to Florida, spend 20 or so good years there, and then when they become more frail, move back to Massachusetts to be near their children, making all of this residency planning for naught. Also, just as a matter of opinion (and as a Massachusetts taxpayer), if you’ve worked successfully in Massachusetts to build up the savings that allow you to retire with two residences, and presumably educated your children in Massachusetts schools, doesn’t Massachusetts deserve your tax dollars more than Florida? I’d also point out that if you still own your Massachusetts residence when you pass away, it will be subject to Massachusetts estate taxes even if the rest of your estate is not.

 

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