Moving to a new state comes with a lot of work and checklists that have to be taken care of, and while it’s stressful, it’s also exciting! If you’re someone who likes to keep track of everything, we’re very sure that your checklists are as detailed as they can be, and that’s how it should be.
In the hullabaloo of getting your entire life to move, you can forget things here and there which aren’t uncommon. But, it’s different to forget a coat or to forget to inform someone that you moved, and it’s totally different to do something that’s as important as establishing residency!
While you might laugh at the prospect of forgetting to do something this important, states only give you a 183-day period to get this sorted. Before we get into the steps to establishing residency, let’s first look at a very common question that gets asked very often.
Why Do People Establish Residency In Different States
For those of you wondering why establishing multiple residencies is becoming so common, let’s look at two very common reasons why people choose to establish residency in a different state.
1. To Avail Of In-State Tuition
We don’t need to explain how expensive higher education has become and the debt that students fall into because they want to access it. Being a resident of a state, on the other hand, gives students access to in-state tuition which is usually half of what those residing outside the state have to pay. For this very reason, applying for residency in a state where you want to access higher education might be a very clever and economical idea.
But, if it’s something you’re considering, you have to make sure that you meet your university or college requirements for establishing residency. These schools or universities could ask for anything from the evidence that you’ve lived in the state or the surrounding local community for a lengthy period of time. If the university’s website doesn’t have any information about this, you can always call the Registrar’s office.
Also, remember that you can’t have established residency in two states just to avail of in-state tuition in both states. You can only claim for one state’s in-state tuition at a time, and if you’re found guilty of not doing so, you will be heavily fined or prosecuted for fraud.
Also See: Average College Tuition Costs By State
2. For Better Tax Benefits
It’s obvious, but it’s also one of the biggest reasons why people move and establish a residency in a different state. Not all states in the country have the same tax margins; in fact, states like Florida, Nevada, and Texas don’t even have a state income tax. You might not know this, but for this very purpose, people from high-taxed states like New York usually have second homes in states with no income tax like Florida and establish domicile there!
Personal taxes, sales tax, and business taxes are also different in every state so moving to one where you can avail of a wide range of tax benefits will save you a lot of money.
There might be several other reasons why people want to establish residency in other states like wanting to vote in a swing state or wanting better public school education for their children. Whatever the case, since the period of stay in the state for establishing residency is only 183 days, many take the leap because it’s well worth it.
See Also: States with Lowest Tax Rates
Steps To Establishing Residency In A New State
If you want to establish residency for one of the above reasons or you’re moving to a new state, it’s time to look at how you’ll be establishing residency in that state. To give you a rough idea of how you can go about the process, we’ve created a step-by-step guide for you!
1. First Decide Where You Want To Live
The first and foremost step to establish residency is to decide the place where you want to settle depending on the amenities available, social life, and the expenditure involved to buy an independent house or a flat or renting one. For example, young professionals might focus more on job growth, average household incomes, and entertainment. On the other hand, older residents look for places that are equipped with all essential services, have good healthcare systems, and aren’t as bustling as major cities.
While many move because of job transfers, you might be someone who can make the choice on your own. This is going to be the most important decision you make as moving residence involves a lot of physical, emotional, and monetary effort, so start thinking in advance and make the right choice based on research and your needs. You can go through our blogs about Best States to Live in to decide on which state you can move to
2. Establish Domicile
If you’re moving and you want to make your new state your home, you will have to establish a domicile. You might have noticed the terms “residency” and “domicile” cropping up multiple times during your research, and if you don’t know what the difference between the two is, we’ll put it down for you in simple terms.
What Is The Difference Between Domicile And Establishing Residency?
Remember that you can have residencies in different states, but your domicile exists in one and one state only. Your domicile exists in a state where you decide to reside permanently, which is why if you want to establish a domicile, you have to be physically present in that state.
You also have to show evidence that you will remain there permanently and have a true intent about the same. So, in short, establishing a domicile takes a lot more effort than just establishing residency. Usually, you as a taxpayer will have the burden of proof where you’ll have to provide documentary evidence of your presence in the state and the time you spent there.
The government also looks at other types of evidence, and for you to have a basic idea of it, we’ll give you a short list of what the government looks at as evidence of a permanent change in domicile:
- Your employment location.
- Whether your employment has been classified as permanent or temporary.
- Your memberships in country clubs, fraternal and social organizations.
- The state of insurance of your fishing and hunting permits or driver’s license.
- Your living quarters in your previous state and whether you bought property or not.
- If you serve on a board of directors at a charity or a business.
- Where your business transactions are carried out, which also includes investments and business relationships.
- Your child’s school’s location.
3. Change Your Address
Once you move, an obvious part would be to change your address. Apart from informing friends, family and acquaintances about this change of address, the change also has to be made in three different places without fail. These include the USPS, the IRS, and all your utility providers. Let’s take a look at these down below:
Once you’ve bought a house or rented one and signed a lease, the first thing you must do is to change the mailing address with the USPS. You can visit their website USPS.com and update your new address and the date from which you would like to receive all mails depending on the approximate date of moving.
If you wish to get started immediately and you’ve already established residence even before you’ve moved, you can inform them and have your mails forwarded. Even this service can be accessed on their website where you just have to put in the date from which you would wish for your correspondence to be forwarded.
Informing Your Utility Providers
We all have a large number of people who act as utility providers and see to it that we have what we need day in and day out. So, informing them about your change of address is something you must do without fail.
In a scenario that you’re moving to a neighborhood close by, you can give them specific dates to turn off and turn on utilities like water and sewer, electricity, internet and cable, security system, trash, phone, and satellite TV.
Also, don’t forget to inform your insurance company that you will be moving. If you’re moving to a new state, we suggest you also compare the premiums charged by different insurance companies.
Informing The IRS
It’s very important to update your information with the IRS at the earliest as it will help you to get all your tax refunds and correspondence in a timely and systematic manner. You will have to fill and submit Form 8822 which allows residents to submit their new address when moving from one state to another.
4. Update Information Regarding Your Bank Account
If you’re moving to a nearby state, it’s mandatory that you inform your bank about the change in address. You might also be required to open a new bank account in order to establish residency and the new bank account number will also be updated. Don’t forget to update your credit card’s billing address as soon as you move either!
5. Apply For A New Driver’s License If You Want To Drive
If you’re moving to a new state and already have a driving license with a car, then the first thing to do is to register your car and get a new license plate. You can get things fast-tracked by taking an appointment online with that state’s DMV even before you’ve moved. Remember that DMVs usually have a short period to apply for registration or change your car’s title, so research and get your documents in order before you move.
You can also walk to a nearby DMV in your new state with your old driving license, documents of proof of residency (water bill, electricity bill, etc.), social security card, and any other forms of identification that you have, and fill the forms required. Some states might require that you take an eye test or a driver’s test, so be ready for that too.
6. File For Taxes
Another admin-related tax that you mustn’t forget to do once you’ve moved and applied for residency is filing for tax returns. If you skip this part, your process of establishing residency might get slowed down. If you’re aware, filing for taxes in a new state can turn into a tedious and nightmarish process, especially when you’re in the middle of settling down.
Since it can get complicated if you’ve never done it before, we suggest you take the help of an accountant in the first year of filing returns so that you don’t have to run around and stress about it. Once you’re familiar with the process, you can start doing them on your own.
7. Register To Vote
Don’t forget to register to vote in the state that you’re moving to while you also apply for residency. Did you know that when you’re visiting the local DMV for a driver’s license you can also register to vote? The other way out is to call or visit the local town hall where they will help you to register to vote.
Also See: Moving Out of State Checklist
Can My Primary Residence Be In Another State?
Yes, as we’ve mentioned before, you can have residencies in multiple states. It is your domicile that can only be established in one state.
How Can I Live In Two States At Once?
The best solution here is to have homes in both states; you can rent out your house or put it up as an Airbnb when you’re physically not there.
How Do I Prove My Residency Without Bills?
If you don’t have your utility bills, you can also always provide other forms of evidence to prove your residency. These include bank statements, tax documents, official paperwork or a lease agreement. Officials will look for proof of your name and address on these documents when they’re verifying evidence.
Can You Work In A State You Don’t Live In?
Yes, you can, and you’ll be considered a nonresident of that state. But, you’ll have to pay state income tax on your income to the state that you live in, or your home state. This is provided your home state has a state income tax.
Can You Use Any Mail To Prove Residency?
Yes, but it has to be official and it has to be addressed to you, so talk to your employers to ask them about the same. An official mail is the easiest way you’ll find to prove residency!
Whatever your reason may be for wanting to establish residency, the process is quite straightforward, and all you have to do is be prepared. Keep all your documents in order and don’t forget to check your new state’s official website to get specific and accurate details of everything you’ll need to keep ready for the process. If the process gets too much, don’t shy away from asking a professional for help! You can see our Article on Best Out of State Movers to know about Professional Moving Companies