Thousands of people were eager to answer that question last year when the coronavirus pandemic changed their living and working conditions. The Sunshine State’s offerings of sandy beaches, warm winters, and importantly, no state income or estate taxes, became increasingly more attractive and quickly drew an influx of new residents. However, to become a Florida resident eligible for these tax savings, a new Florida resident must properly establish domicile in the state.
A person’s “domicile” is the place the person intends to make their permanent home. A person will only have one domicile but may have more than one residence. You would think that spending time in Florida or owning real property in Florida is enough, however, that is not always the case.
A new resident can demonstrate their intent to make Florida their domiciliary in different ways. Among other things, we recommend our clients to take these steps: (1) record a Declaration of Domicile in the Florida county they will reside, (2) timely apply for the Homestead Exemption for their Florida residence, (3) declare in their estate planning documents that they are a Florida resident, (4) register to vote in Florida, (5) register their tangible property in Florida, (6) obtain a Florida driver’s license, and (7) file their Federal income tax return with the IRS at the proper branch using their Florida address.
It is also important that new residents demonstrate their intent to abandon their former domicile. We recommend our clients to take at least these steps: (1) record a Declaration of Non-Domicile with the state and county of their former residence, (2) relinquish all driver’s licenses from other jurisdictions, and (3) file a non-resident income tax return in the former state of residence.
Who knew there were so many considerations in establishing domicile? You probably thought that moving to Florida meant more time on the beach and less paperwork. However, this attention to establishing domicile will avoid the risk of being considered a multistate resident later. After all, no one wants to be subject to state income tax from a state they no longer call home.
Click here for relocation resources and to find out how we can assist you in your transition to the Sunshine State.
Jones Foster is a commercial and private client law firm headquartered in West Palm Beach, Florida. Established in 1924, the Firm has served as an integral part of South Florida’s growth and prosperity for nearly a century. Through a relentless pursuit of excellence, Jones Foster delivers original legal solutions that help clients, colleagues, and the community to move forward. The Firm’s attorneys focus their practice in Real Estate, Litigation & Dispute Resolution, Private Wealth, Trusts & Estates, Corporate & Tax, and Land Use & Governmental. For more information, please visit www.jonesfoster.com.
