Since Pennsylvania doesn't tax pension or SSDI, I'm considering becoming a resident there. Is there anything I should be aware of?

My husband gets a New York Police Department (NYPD) pension and Social Security Disability Insurance (SSDI), and I work full time in New York City (NYC). We have a home in Pennsylvania and are buying a home in New Jersey. I am seriously considering becoming a Pennsylvania resident because Pennsylvania won't tax the pension/SSDI and the car insurance will be much cheaper. Anything I need to be aware of if I choose this route?

It is clear that Pennsylvania will not tax your husband’s NYPD pension and SSDI. Since New York will most likely tax the pension at about 6 percent, this could be a significant tax savings. Consult an insurance agent for any questions you may have related to car insurance. Please keep in mind that residency is determined by a number of factors like where your car is registered, insurance, where you get your mail, etc.  Most importantly, where you for sleep 182 days or more in a year is where you are a resident.  You must plan accordingly when filing taxes. Check out PICPA’s CPA Now blog on residency as it relates to Pennsylvania taxes.
 
You may have to put up with a lot of Steelers and Eagles fans, but other than that, it seems like living in Pennsylvania would be a good move.
 
For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: John R. Steffee, CPA, is with Simon Lever LLP in Lancaster, Pa.