To become a Florida resident, there are several steps to establish that you are a bona fide resident of the State of Florida:
- File a Florida declaration of domicile
- Obtain a Florida driver’s license
- Register your vehicles in Florida
- Register to vote in Florida
- Open a bank account in Florida
- Notify state taxing authorities
- File for Florida homestead protection
- Update your estate plan as a Florida resident
What is Domicile?
The place where you live with the intention that it’s going to be your permanent residence for an indefinite period of time is referred to as your “domicile.” It determines what state you must pay taxes to, and it can make you eligible for state programs and benefits. But what happens if you have more than one home, which is common for many new Florida residents?
If your time is spent in Florida and one or more other states during the year, you must choose one state and clearly indicate your choice of domicile by establishing key relationships to and with that state. You should be able to persuade your former state of domicile that you have, in fact, abandoned your domicile in that state and that you’ve established your new domicile in Florida.
Becoming a Florida resident is fairly easy. Other than a dispute regarding the homestead exemption for creditors and for property tax benefits, the stakes for becoming a Florida resident are fairly low as far as Florida is concerned. The far more important issue – and the primary reason why people are concerned about becoming a Florida resident – is what needs to be done to not be a resident of another state. The issue normally arises when a person relocates from a high tax, northern state, to Florida, primarily to avoid income taxes in the former state. Oftentimes, the person moving to Florida may have had a residence in Florida and another jurisdiction, and already spends significant time in Florida. So how does a Florida “snow bird” become a resident of Florida and give up residency in the former state?
We begin with how to become a Florida resident.
File a Florida Declaration of Domicile
A Florida “Declaration of Domicile” is a publicly recorded document that allows you to declare that you are a bona fide resident of Florida because you reside in and maintain a place of residence there. You may download the Florida Declaration of Domicile here. You must declare in the document whether you maintain another place or places of residence in some other state or states. If so, you must confirm that your residence in the State of Florida constitutes your predominant and principal home.
The Florida Declaration of Domicile must be signed by you in front of a notary public or the deputy clerk of a Florida court. It must then be recorded in the public records of the Florida county where you reside. There’s a minimal fee for recording. Although signing and recording a Florida Declaration of Domicile is not required to establish your Florida residency, it does put the public on notice that you have indeed made Florida your permanent home.
Obtain a Florida Driver’s License
You must have a valid Florida driver’s license if you drive and are a Florida resident. If you don’t have one but declare Florida as your residence, it will provide evidence to the state you’re trying to cut ties with that you haven’t officially moved. A person has 30 days to obtain a Florida driver’s license after the filing of the Declaration of Domicile.
The Florida Department of Motor Vehicle will confiscate your license from your former state and report to your former state that your former license is not valid. States track driver’s license data under the Driver License Compact, an interstate collective that most states have joined.
For persons who do not drive, Florida issues a non-driver ID card, which can serve all purposes that a driver’s license would serve – other than driving.
Register Your Vehicles
You should also register your automobiles, boats, and other vehicles that are located in Florida with the Department of Motor Vehicles. A person receiving a new Florida driver’s license who is also registering their vehicles in Florida must notify their insurance carrier of these changes. Proof of insurance will be required to register a car in Florida.
Register to Vote in Florida
Registering to vote in Florida – and actually voting in Florida – is a great method to prove Florida residence. It shows that one has taken their new citizenship in Florida seriously.
Open Local Bank Account
Another way to show your intent to become a Florida resident is to transfer at least one out-of-state account to a Florida banking institution. It’s a good idea to do this with all your financial accounts, although some might be located in states you have never lived in. In particular, the main checking account used to pay bills should be established with a Florida banking institution. Even if you keep the same bank before and after the move, you can still ask that the bank redo the account as belonging to a Florida resident.
Notify Tax Officials
A final income tax return should be filed in your former state. Most states provide for a statement that the return will be the final return with that state.
For federal taxes, returns are sent to one of several processing centers, based on the state of residence. It is imperative that the federal tax return shows the new permanent address in Florida and is sent to the proper IRS service center. View the list of where to send Form 1040, based on what state you live in.
Apply for the Florida Homestead Exemption
The Florida homestead exemption has three important aspects: property tax reduction, creditor protection, and inheritance rights. See the Complete Guide to Florida Homestead for a comprehensive discussion of Florida homestead. Applying for Florida homestead benefits will provide property tax benefits and will further bolster that one’s residence is in fact in Florida. For renters, it is not fatal to becoming a Florida resident that one does not own a home.
If your former state provides a similar property tax reduction system for permanent residents, it is critical that those benefits be given up if you plan on keeping the former home. If you keep the property tax benefits in your former state, that state may challenge your position that you have given up residency in that former state – possibly subjecting you to a continuing income tax liability in that former state.
Update Your Estate Plan
Updating one’s estate plan as a Florida resident is further proof that one is a Florida resident. Read the Estate Planning for Florida Residents Guide. But there are important other reasons to update an estate plan as a Florida resident. First, if a will states that one is a resident of another state and that state has a state estate or inheritance tax, that state may attempt to collect that tax. If there is the possibility that an estate plan might be challenged, making sure that it is clear which state you are a resident of can be important. Here is an example of some very messy and expensive estate litigation over which state the decedent resided in.
Florida also has special rules regarding the inheritance of a primary residence, known as Florida homestead. These Homestead rules must be taken into account for every estate plan. Florida also has specific rules for powers of attorneys that must be complied with to have a valid power of attorney in the State.
Remember to Cut Ties With Your Old State
Cutting ties with the former state to avoid income taxes in that state is a primary driver for many people seeking Florida residency. In order to truly become a Florida resident, cutting ties is a necessary step in changing one’s residence to Florida.
Some states are fairly aggressive in challenging the residency status of people who move to Florida. New York is a fairly typical example, and will challenge the residency of high earners who have not cut sufficient ties with New York. So, the real issue is how to lose one’s status in the former state. We focus on New York because so many New Yorkers have moved to Florida.
How to Terminate New York State Residency
Your New York domicile does not change until you can demonstrate that you have abandoned your New York domicile and established a new domicile outside New York State. New York publishes a comprehensive guide to determine when one is a New York domiciliary and needs to pay New York income taxes. Read the New York domicile rules here.
The highlights of the rules center around the time one spends in New York State. You are a New York State resident for income tax purposes if:
- your domicile is New York State; or
- your domicile is not New York State but you maintain a permanent place of abode in New York State for more than 11 months of the year and spend 184 days or more in New York State during the tax year.
Even if one spends very little time in New York, one can still be a New York domiciliary for income tax purposes. Therefore, giving up New York State domicile status is critical. New York has issued audit guidelines so that New York tax auditors can determine one’s domicile status. The New York audit guidelines can be found here.
The New York domicile audit guide focuses on the following factors:
- The value and size of the New York home as compared to homes elsewhere
- Amount of time one spends in New York
- Whether one still maintains active business involvement with a New York business
- Where “near and dear” items are located
- Family connections
- Voter registration
- Address used for mail
- Driver’s license and car registration
In reality, if one’s minor children and spouse continue to live in New York and the children go to school in New York, it will be difficult to establish that one really intends to become a Florida resident and is no longer a New York domiciliary. This is particularly so if one’s family continues to live in an extravagant home and the Florida home is far more modest.