Massachusetts Tax Residency: Should I Stay or Should I Go?
Massachusetts taxes individuals based on the concept of tax residency, namely, whether the individual either 1) is a Massachusetts "domiciliary" by choice or 2) has a regular presence in the Commonwealth.
This seminar explored how to avoid or terminate Massachusetts tax residency status -- particularly if you are currently a Massachusetts domiciliary and wish to reside elsewhere. Changing your state of residence involves a surprisingly complicated series of steps, actions, and intentions, starting with "proving" that you have a forthright desire to move to another jurisdiction, but also avoiding the trap of "statutory residency," which can make you a Massachusetts taxpayer even if you clearly "reside" in another state. Our panel described, based on representing many taxpayers over the years, the list of highly nuanced factors that the Massachusetts Department of Revenue (DOR) may use to claim that you are still a Massachusetts taxpayer, even after you have left the Commonwealth. The stakes can be huge -- especially in a year when you sell a business or engage in a major transaction.
This seminar also provided detailed guidance on how Massachusetts taxes nonresidents on so-called "Massachusetts-source income," including income from the exercise of options after leaving Massachusetts.