Do I Have to File New York Taxes If I Live Abroad?
State taxes may seem like a straightforward topic for an American living abroad, but moving to another state – or even another country – doesn’t exempt a taxpayer from their obligations to either the federal or state government (at least, not automatically). Each state has its own laws and expectations regarding who must file an income tax return and how much they must pay, though a person’s current place of residence certainly has some bearing on what they might owe. If you moved away from New York sometime in the last year, or even before that, you may have to file an income tax return with the state. To find out if you have to file New York taxes if you live abroad, keep reading as the experts at U.S. Tax Help explain.
Who Has to File State Taxes in New York?
The answer to whether you need to file state taxes after leaving New York will largely depend on whether you are classified as a resident, nonresident, or part-year resident. Unfortunately, the state has some convoluted criteria for determining residency, but we’ll do our best to decipher those requirements below.
Residents of New York State
Generally speaking, those who maintain a domicile – the place you intend to be your permanent home – in New York are considered residents, as are those who maintain a living space in NY for more than 11 months out of the year and spend at least 184 days in-state. However, there are two groups of exceptions that may qualify you as a nonresident, even if you are domiciled in New York, as long as you fit all the criteria in either group.
To qualify for Group A, you cannot maintain an active residence in New York during the tax year, and you must have a residence out-of-state for the entire year as well. You also cannot spend 30 days or more in the state over the course of that year.
The criteria for Group B are more complex. To qualify, you must have spent at least 450 days out of the country over a period of 548 consecutive days. You, your spouse, and any children who are not adults can only spend 90 days or less in New York during that 548-day period, and any time spent in-state during a specific tax year must be proportional to the number of days spent outside New York in that same year. Determining that last threshold can be tricky, but a skilled accountant should be able to help.
Nonresidents of New York
If you were not a resident of New York for any part of the year or met either group of criteria listed above, you will be considered a nonresident for New York State tax purposes. That in and of itself does not absolve you of all responsibility to the state, however; you will be required to file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, if you had NY-based income above a certain level, want to claim a refund or certain credits, or had a net operating loss with some bearing on your personal income taxes for the year.
Part-Year Residents of New York
Essentially, if you qualify as a resident or nonresident for only a portion of the tax year, you will be considered a part-year resident of New York. The income tax filing requirements for this type of resident are appropriately mixed: if you earned any income while a resident or had any New York-based income while not a resident, you will have to file Form IT-203. Other circumstances may require you to file a state tax return as well; a qualified professional can help you determine your state income tax obligations.
Federal Income Tax Requirements for Americans Living Overseas
It’s important for expats to remember that their obligations to the U.S. government don’t stop at the state level. Even if you live in another country, you will have to file a federal income tax return if you are still a citizen, as the U.S. taxes based on citizenship instead of location. You will also likely need to report financial assets held overseas, such as bank accounts valued at greater than $10,000.
That said, there are a few advantages to being an expat. The foreign earned income exclusion is probably the most popular of these benefits; it allows you to deduct more than $100,000 from your taxable income, as long as it is active income (e.g., money earned through employment, not rent or other passive forms of income). There are also provisions that allow you to deduct your housing costs, further reducing your tax burden. If you live outside the U.S. and would like to know more about how you can save money on your state and federal tax obligations, the experts at U.S. Tax Help are standing by to assist you.
International Tax Specialists Serving American Expats Living Abroad
Considering the many complications that come with filing taxes while living in another country, an accountant for expats can be a useful thing. Luckily, the team of international tax specialists at U.S. Tax Help has decades of experience helping expats and foreign citizens navigate the complexities of the American tax system, and we can put that knowledge to work for you, too. To learn more about the services available at U.S. Tax Help or to speak with a qualified tax professional, visit us online or call (541) 362-9127 today.