How to Establish Residency in Another State
Do You Need to Establish Residency in a Different US State?
Tax Benefits of Living in Different US States
Because every state has its own tax policies, you may want to take advantage of certain financial benefits available in another US state through establishing residency there.
For example, for lower personal taxes, business taxes, or to eliminate state tax altogether, you may want to claim residency in a state other than your own. You might alternatively wish to incorporate your business in a state having no state income tax.
In addition, you may choose to seek residency in a different state for the purpose of securing in-state tuition at a university or college that you would be unable to attend otherwise, because of the expense of out-of-state tuition and fees.
Establishing Residency for in-State Tuition
You may be interested in paying lower, in-state college fees rather than higher, out-of-state tuition.
In this case, check with the college or university you plan to attend and determine their specific requirements for state residency. These must be followed exactly for you to reap their benefits.
Some schools require proof that you have lived in the surrounding local community for at least two years prior to even applying to the college or university. Check your chosen school's website or call its Registrar's Office in order to make sure that you understand these types of residency requirements. On handy alternative is to enroll in and complete online classes while you decide on a move and for a short time after moving, if you are waiting for time requirements of residency to be fulfilled.
Refrain from taking advantage of in-state residency status for college in two US states at once, because this will create a problem. A student may claim residency for in-state tuition and fees in only one state at a time. If a student is found to be double registered for residency status in two states, cost privileges will end and a fine or prosecution for fraud may result. Further, this double residency may raise a red flag for voter fraud.
However, if you are in the US military, many universities and colleges will offer you nonresident (out-of-state) tuition waivers. This benefit is often extended to dependent relatives living with you as well. This lowers the cost of an education for the entire family at once.
Higher Education Facilities in States in Yellow Provide Lower Costs to Neighboring States in Yellow
How to Establish Residency in Another State
Establishing residency in a new state can be performed generally in the same manner in all of the 50 US states. However, you need to check any specific state and the particular part of the state that interests you for more details, which include the length of time one must live in that state in order to qualify legally as a state resident. Be sure to examine a state's specifications for making actual residency complete. Some US states require that you live in the location for only six months, while others require a full year to establish residency.
You will need an actual street address in your new state, and not a P.O. box or a private mail box (PMB) address, which is often listed as only a street address. The US Postal Service can determine fraudulent residencies in this way and it can cost you at least a hefty fine.
You may not claim residency in two different US states at the same time, because this could lead to multiple voting in federal elections, which is a crime. Even if you own homes in two or more states, you must choose one as your primary residence.
Steps to Establish Legal Residency in Another US State
- Locate a place to live in the new state. Find an apartment or purchase a home if you can.
- Spend substantial time in the new state during vacations and holidays.
Maintain social and business relations in the new state.
Have at least one bank account in the new state.
Establish a living address with the U.S. Postal Service by going to the nearest post office and filing a change of address form.
Have your important documents transferred to your new address (insurance, memberships, licenses, etc.).
You will then need to find a job, pay taxes, and file tax returns in the US state in which you seek residency.
Obtain a driver's license and car registration in your new US state, or apply for a non-driver's state ID card if you do not drive.
Register to vote in your new state.
If you have professional licenses, have them transferred to your new state. Do this by contacting the governing board of your occupation in the new state (nurses, physicians, social workers, attorneys, etc.). Temporary licensing can often be granted immediately while you are waiting for the permanent license.
Official College Guide to Residency
- Guide to State Residency
Complete guide offered by CollegeBoard.com
Which States Offer Which Tax Credits?
Different states offer different kinds of tax credits for businesses, which may include breaks for job creation, research and development, and/or investment.
Changing State Residency After Retirement
If you're planning your retirement and thinking about moving, you may want to consider the tax burden you'll take on in different states. Of course, state taxes are important to everyone, but retirees must take extra care since their income may be fixed.