New York Residency and Investment Income

For an investor leaving New York, the largest tax question may be whether New York agrees that you left.

New York has two principal resident paths

You can generally be a New York resident because New York is your domicile, or because you maintain a permanent place of abode in New York for substantially all of the taxable year and spend more than 183 days—generally 184 days or more—there.

Any part of a day generally counts, subject to applicable exceptions.

Domicile asks where home really is

Changing voter registration or obtaining a new driver's license can be relevant without being conclusive. New York looks to the broader factual picture.

A permanent place of abode has its own test

Cases including Gaied and Obus make the factual relationship between the taxpayer and the dwelling important. Neither “any New York property automatically counts” nor “vacation property never counts” is a safe generalization.

Nonresidents usually escape tax on passive intangibles

Once a taxpayer is genuinely a nonresident, New York generally does not tax ordinary passive interest, dividends or intangible gains merely because the issuer or broker has a New York connection.

Business-connected intangibles, real property, services, pass-throughs, equity compensation and certain former-business income can be different.

New York City adds another reason residency matters

NYC resident personal income tax makes the residency determination relevant to city exposure as well.

Establish the resident/nonresident line first

For a New York move before a major investment transaction, first establish which side of the resident/nonresident line you are on.