321 West 12th Street,
Though this is a California case, I believe this is where both NYS and NYC are going when they audit for domiciliary issues:This was in this morning’s State Tax News from CCH. Generally, California is on the cutting edge along with New York on the subject of residency audit so while this is a California case, I believe it to be the direction in which New York is headed. In short, if you want to no longer be considered a domiciliary of a given state, you need to be prepared to break all ties or such ties WILL be held against you:California—Income Tax: Taxpayers Remained California Residents, Were Denied Other State Tax CreditThe taxpayers, a professional athlete and his wife, remained California residents for personal income tax purposes during the tax years in question because they were domiciled in California prior to the years at issue and failed to prove that they ceased being domiciliaries of California. The taxpayers asserted that they were outside of California for other than a temporary or transitory purpose and became nonresidents when the taxpayer-husband signed a contract to play for a team in Ohio and they moved to Ohio. However, while the taxpayers had some contacts with Ohio, they also retained significant ties with California, including family, property, an on-going business entity, use of California professionals for financial management and health care, and various California filings and registrations. Furthermore, while the taxpayer-husband was primarily in Ohio during the season for his occupation, he spent the off-season in California, and the taxpayer-wife and children spent time during the season as well as the off-season in California. Thus, the evidence showed that the taxpayers had stronger permanent ties to California. During audit and protest, the Franchise Tax Board (FTB) asked the taxpayers for documents that should have been in their possession that would have helped determine where their closest ties were during the years at issue. Failure to provide evidence within their control gave rise to the presumption that the evidence would be unfavorable to the taxpayers’ position if it were provided.
Also, the taxpayers were not entitled to credit for taxes paid to various other states (other than Ohio) because they did not provide signed and certified copies of the other state tax returns for the years at issue or proof of payment of any such taxes to the other states. Reg. 18001-1 provides that no credit will be allowed on account of income taxes imposed by another state until such taxes are actually paid. In addition, the regulation provides that receipts showing the payment of such taxes and certified copies of the returns on the basis of which such taxes are assessed must be filed with the FTB at or before the time the credit is claimed. Murray, California State Board of Equalization, No. 469418, May 22, 2013, released December 2013
New York State Basic STAR Exemption Registration Deadline New York State now requires homeowners to register for the Basic STAR exemption. In years past, this exemption (which gives a tax credit to homeowners with an annual income less than $500,000) was automatic, but if you want to receive it this year, you'll have to register online! Read this article from The New York Observer to see if this exemption applies to you, and if it does, be sure to register before December 31.
OMA struck down!
Happy Pride! Happy Independence Day!
While we’ve always believed that all marriages deserve the same rights, protections, and benefits, we are happy that the Supreme Court’s ruling brings with it the full force of the law. After celebrating the end of DOMA last week, this week we move on to looking at how the changes to the law will impact your lives.
Sara Brandston and Co. is committed to being a strong resource for those of you already married, and those who are planning on getting married. For the past two years we’ve become experienced in doing New York Marriage Equality Act returns. Now we have begun work to determine what the Edie Windsor ruling will mean to you on a practical level.
Currently, we’re not sure of much, so we aren’t running to amend your returns yet. I’ve been working with a dozen or so colleagues to figure out such practical questions as: Must we amend? Which years can we amend? If you’ve moved to another state what does that mean for your ability to amend?
Most important now is to work on what we do know you can change immediately:
Review the benefits available through work for your spouse
Review the beneficiaries on your retirement and annuity plans.
Consult your lawyer to review your will and estate plan.
Review life insurance policies
Change your exemptions at work, via a W-4 form.
Sara can help you with all but the legal work. Stay tuned to our website for updates on the most pressing tax issues. If you’d like to review your past and/or future tax returns, please give us a call.
To follow please find a few links that have been helpful to us in analyzing next moves. Hopefully, they will be helpful to you.
From LAMBDA Legal:
From Bloomberg News:
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