establishing residency in new state?

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rkaz

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I just moved to a new state across the country from where I used to live for the start of my residency training. I plan on returning to my home state after I finish my training. Is it necessary to change my driver's license (and thus my residence) officially to the new state? Of course, I have my utility bills to my new address, but I'd still like to be a resident of my past state - in case there would be any issues with returning after I'm done. Don't know if it really matters or not. I'm just wondering if there will be any issues come tax season when I have to pay taxes, since I presumably will be paying taxes in my new state and not the old one, although would be a resident of the previous state. Just wanted to know if anyone has any info on this. Thanks!

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I just moved to a new state across the country from where I used to live for the start of my residency training. I plan on returning to my home state after I finish my training. Is it necessary to change my driver's license (and thus my residence) officially to the new state? Of course, I have my utility bills to my new address, but I'd still like to be a resident of my past state - in case there would be any issues with returning after I'm done. Don't know if it really matters or not. I'm just wondering if there will be any issues come tax season when I have to pay taxes, since I presumably will be paying taxes in my new state and not the old one, although would be a resident of the previous state. Just wanted to know if anyone has any info on this. Thanks!
Your new state probably has a law that says you have to. Most (all?) do.

That said, these laws are rarely enforced. You might get in some trouble if you get a speeding ticket in your new state if it's obvious that you live there and you give them your old drivers license, but otherwise there's no real issue. You'll pay your taxes in your new state but taxes have little to do with drivers license.
 
I'm a CPA and a member of the bar. I do hundreds of returns a year. Unless there's a reciprocity agreement between the state you're working in and your state of residence, you will have to file a state tax return in the state in which you are working. Without a reciprocity agreement your residency program will withhold state income taxes and remit them to your "new state". If you really want to maintain ties with your old state you could file a state tax return there and in all likelihood get a credit for the state taxes paid to your new state. Don't forget to deduct moving expenses and student loan interest on your first federal return. Take the Lifetime Learning Credit as well.

You also need to check with your new state's DMV about the need to get the plates and title of your car changed. Talk to your insurance company as well. You don't want to get into an accident with voided insurance.
 
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Some states do enforce these things.

Is been here about 6 months and hadn't gotten around to registering my car here; I was pulled over for an illegal U turn and was let off for that, but issued a "fix it" ticket for the OOS plates and registration. GEICO also told me that coverage would have been an issue if I had a problem and the car wasn't registered in the state where I live.
 
In addition to the tax and dmv issues, you are going to get jury duty summonses in the state you are resident in. Might be hard to get out of these without claiming a residency elsewhere.
 
In addition to the tax and dmv issues, you are going to get jury duty summonses in the state you are resident in. Might be hard to get out of these without claiming a residency elsewhere.
I'd say that's a benefit of not changing residency. If you get a jury duty summons for your old state you just respond you're not living there and you won't get one for your new state because you're not a registered driver or voter.
 
I'd say that's a benefit of not changing residency. If you get a jury duty summons for your old state you just respond you're not living there and you won't get one for your new state because you're not a registered driver or voter.

Not really -- if you ever need to prove that you retained that prior residency for some governmental reason, you just may have hosed yourself telling a court you aren't residing there. They keep records of the excuses you submit. Big brother is always watching.
 
I just moved to a new state across the country from where I used to live for the start of my residency training. I plan on returning to my home state after I finish my training. Is it necessary to change my driver's license (and thus my residence) officially to the new state? Of course, I have my utility bills to my new address, but I'd still like to be a resident of my past state - in case there would be any issues with returning after I'm done. Don't know if it really matters or not. I'm just wondering if there will be any issues come tax season when I have to pay taxes, since I presumably will be paying taxes in my new state and not the old one, although would be a resident of the previous state. Just wanted to know if anyone has any info on this. Thanks!

Just curious, but what possible benefit would you have in keeping residence in your past state while you're in training. Other than slightly different costs in car registration and taxes, I'm not sure what you'd really gain here.
 
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Why would there be issues to returning to your original state that would be prevented by you staying a resident of that state? I can see why this might matter for college or med school, but once you hit residency, you're not going to be going to school anymore, and once you move back to your old state, you can just change residencies back...
 
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Just curious, but what possible benefit would you have in keeping residence in your past state while you're in training. Other than slightly different costs in car registration and taxes, I'm not sure what you'd really gain here.

Convenience of not re-registering a car, tax savings, being able to vote in a jurisdiction where your vote might matter more, being able to claim you've always lived in the state when you run for public office, not being a resident of a Community property state if your marriage goes south, etc. Lots of advantages/disadvantages that might not apply to most.
 
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If you are a resident in one state (permanent residence) and work in a different state, do you not have to pay taxes in both states (unless military)? The town my residency was located was half in TN and half in VA. TN does not have income taxes, but if you lived in VA and worked in TN you pay VA taxes or if you live in TN and moonlight in VA you pay VA taxes still.
 
If you are a resident in one state (permanent residence) and work in a different state, do you not have to pay taxes in both states (unless military)? The town my residency was located was half in TN and half in VA. TN does not have income taxes, but if you lived in VA and worked in TN you pay VA taxes or if you live in TN and moonlight in VA you pay VA taxes still.

This was kinda already answered above, but...

Without a military connection, you will pretty much always pay income taxes to the state in which the work was completed (assuming such a tax exists). If that state is different from your domicile, then you may end up also paying income tax to your own state also, depending on whether the two states have a reciprocity agreement, whether or not your state collects income taxes, and whether or not your state chooses to give you a credit for taxes paid elsewhere.

Although I don't know the specifics of Virginia's tax laws, your example is generally correct. Most states will collect income tax on its residents for work performed in a non-income tax region.
 
This was kinda already answered above, but...

Without a military connection, you will pretty much always pay income taxes to the state in which the work was completed (assuming such a tax exists). If that state is different from your domicile, then you may end up also paying income tax to your own state also, depending on whether the two states have a reciprocity agreement, whether or not your state collects income taxes, and whether or not your state chooses to give you a credit for taxes paid elsewhere.

Although I don't know the specifics of Virginia's tax laws, your example is generally correct. Most states will collect income tax on its residents for work performed in a non-income tax region.

Yeah, you generally end up filing a return in both states and ultimately pay taxes in one. The way most jurisdictions generally work this is to give you a credit for taxes paid in the other state against taxes owed in your home state. So you end up paying a net of just the higher states taxes.
 
Thanks everyone for your replies. I do appreciate it. I am from the southwest, and presently doing my residency training in the midwest.

For me, car isn't the issue - as I got a lease on a car after I moved to the midwest, so it has my new state's plates and registration.

The thing is that my current driver's license has my parents' address back home, which is my permanent address since my folks aren't planning to sell their home any time soon. If anyone ever needed an address proof, I have no problem if one of my mails got diverted to their home, as I could trust that it would be safely kept for me. That would be a reliable address to contact me, if someone ever needed. If I got a new driver's license here, it would just have my current apartment address.... and I might not even be living in this apartment next year as I may want to look for a nicer place, so I don't particularly like the thought of having an address-proof (like a license) of someplace that I am not even living.

Furthermore, I am fairly set on returning to my home state after residency/fellowship, so I'd eventually have to get another driver's license again after I returned back home in a few years. Additionally, I consider my home state to be a much more desirable place to live (due to no-snow winters) with many more people moving there vs my current location, so in the theoretical situation of there ever being some kind of cap on migration back to my home state, I don't want to ever have difficulty moving back. I actually got a substantial tuition scholarship in medical school due to being a resident of my home state, which requires me to work in my home state for a few years post-residency/fellowship... so I'm almost positive to be going back there (unless I get into a relationship with someone in this area and end up staying here, which would also require me to pay back my scholarship). So at this point, my new state is just for a few years stay for some good quality medical residency training, until I return home... at least I feel this way after living here for only 2 months.

How does one find out which states have reciprocal agreements? It seems the tax situation is another headache I'd prefer avoiding, but I may have to file something back in my home state if I don't change my residence.
 
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Sorry, I guess I'm overanalyzing something that doesn't need to be. If it really doesn't make much of a difference, I can just go get my new driver's license here this afternoon and get it done with.
 
Understand that, as the laws are written, you do not have a choice about changing your residency. Technically, you are a resident of your new state, irrespective of your intentions. The only reason why this is confusing is because these laws are rarely enforced, which leads to many people being unaware or simply not complying. Not complying is a risk, albeit a small one. Just realize that if, for whatever reason, you get caught, the well-I'm-only-living-here-for-residency-and-then-going-"home" excuse won't work.

With respect to your vehicle, I generally follow the 2-out-of-3 rule. That is, ideally the registration, vehicle location, and driver's license should all be the same state, but two out of three ain't bad.
 
I find it highly unlikely that there is going to be any migration cap back to your state... especially if they expect you to work there after residency. Additionally, you are required to inform the DMV whenever you have an address change, even if you don't change your license. So if you aren't living in your apartment next year, you would notify the DMV of your address change and that would be that.
 
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