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Retiring and moving to Florida does not necessarily mean you will be free from the Pennsylvania Department of Revenue -- especially if you still own property in the state. The ideas of “residency” and “domicile” are specifically defined, and breaking Pennsylvania residency isn’t as easy as driving down I-95.
By Veronica A. Caputo, CPA | Grant Thornton LLP
You worked, you saved, and now you can retire. Florida beckons to you. You pack up and move to the Land of the Mouse and of no personal income tax. But as you soak up the sun you get a notice from the Pennsylvania Department of Revenue (DOR) for nonfiling/nonpayment. Why?
You likely received the notice because you kept your Pennsylvania house. The DOR still has you listed as a resident because it lists your Pennsylvania property as your domicile.
The ideas of “residency” and “domicile” are specifically defined for personal income tax (PIT) purposes, and breaking Pennsylvania residency isn’t as easy as buying a home in Florida and driving down. The Pennsylvania DOR provides a guide on what creates residency and how your state of domicile is determined. In general, you must consider the following items to determine your residency.
The answer is generally yes if you are domiciled within the commonwealth, unless you ...
This is the tricky question. The answer is generally yes if ...
You can only have one domicile at any point in time, but you can change your domicile. To support your change in domicile to Florida, you should document your intent to abandon your former Pennsylvania home as your primary home; your intent to make your Florida home your primary home (new domicile); and your physical presence in Florida. To support this domicile change, you should to review the 29 items in the guide, and analyze your connections to determine if your greatest connections are now in Florida.
Even if you become a resident of Florida, as a nonresident of Pennsylvania you may still be subject to the state’s PIT on the following:
This blog post may not answer all of your questions, but hopefully it gives you some things to consider.
Veronica Caputo, CPA, is a senior manager in the state and local tax department of Grant Thornton LLP. She is an active member of the PICPA State and Local Tax Committee and a frequent speaker and author on local tax issues. She is a speaker at the PICPA Conference on Pennsylvania Taxes.