Multi-State Residency Challenges? What You Need to Know - Palma Financial

We get it ! Managing residency in two states can be quite a puzzle. But don’t worry; we’re here to discuss the top ten steps to stay a full-time resident in Michigan and avoid any part-time residency hassle in California:

1. Establish Domicile in Michigan: To make Michigan your permanent home, consider these actions:

  • Register to vote in Michigan
  • Obtain a Michigan driver’s license
  • Change your address on all official documents
  • Maintain a permanent home in Michigan
  • Spend more than 183 days per year in Michigan

2. Sever Ties with California: Eliminate any California-related factors:

  • Sell or rent out your California home
  • Close any California bank or investment accounts
  • Cancel California memberships or subscriptions
  • Transfer your car registration to Michigan
  • Change your mailing address to your Michigan address

3. Keep Detailed Records: Maintain records of your time spent in each state:

  • Keep a daily or weekly calendar
  • Retain receipts for travel expenses
  • Save copies of airline tickets, hotel bills, and rental agreements

4. Understand California’s Residency Rules: Be aware of California’s residency criteria, including:

  • The physical presence test (over 183 days)
  • The domicile test (intent to make California permanent home)
  • The other factors test (job, property, family location)

5. Be Prepared to Defend Your Residency: Gather documentation to support your claims:

  • Copies of your Michigan driver’s license, voter registration, and other official documents
  • Proof of ties to Michigan, such as property ownership, employment records, and school records
  • Evidence of your intent to make Michigan your permanent home

6. File Your Michigan Tax Return On Time: Timely filing of your Michigan tax return demonstrates your commitment to Michigan residency.

7. Pay Your Michigan Taxes in Full: Meeting your Michigan tax obligations further establishes your Michigan residency.

8. Be Aware of the California Franchise Tax Board’s Audit Program: Stay informed about the potential for audits by the California Franchise Tax Board (FTB) and prepare accordingly.

9. Keep Up-to-Date on California’s Residency Laws: Regularly monitor California’s residency laws, as they may change, ensuring you remain compliant with the FTB.

10. Consult with a Tax Advisor: Seek guidance from a tax advisor to understand residency rules and strategies to avoid being considered a resident of California.

Seize your multi-state residency solution! Schedule your consultation here, REGARDLESS OF YOUR STATE!