Many people own residences in the State of New York. But not all of these people are considered New York State residents for tax purposes.
A New York State resident must pay tax to New York State on all income; a non-resident only pays State tax on income earned from a source within New York State. Therefore, it’s in the best interest of the New York State Tax Department to classify a taxpayer as a full- or part-year resident of the State. The Department sometimes conducts residency audits to determine a taxpayer’s New York State residency.
In the course of a residency audit, the auditor will apply a number of tests to attempt to prove a taxpayer’s domiciled or statutory residency in New York State. The burden of proof is on you, the taxpayer, to prove that you are neither of these two types of New York State resident. This process involves the compilation of highly personal information, and it can feel like your privacy is being violated. You’re effectively being asked to provide a detailed accounting of where and how you spend your time!
In addition to State residency audits, New York City residency audits may also be conducted.
Our attorneys have helped numerous taxpayers through the residency audit process and can assist in making it go more quickly and favorably.