MINNEAPOLIS (WCCO) — A Minnesota Supreme Court ruling may be costly for some snowbirds.
Minnesota residents who live part-time in another state could still get slapped with a hefty income tax bill.
That’s after a 4-3 court ruling that further defines what’s meant by the residency law.
One Minnesota couple will have to cough up $390,000 in income taxes because their claim of non-residency was rejected.
Indeed, parts of the ruling are a chilling reminder to those shedding taxes for sunshine.
Tax attorney Barry Gersick advises anyone splitting time between states to seek counsel before deciding on residency status.
It’s more complicated than just spending over half a year, or 183 days, in your resident state.
“They really try to determine if somebody really did in fact change domiciles, change the center of their life away from Minnesota to somewhere else, or did they just do it in name only,” Gersick said.
Minnesota Department of Revenue uses 26 different factors for determining residency status. And they’re not all that obvious.
Revenue is looking for your focal point, where your most active bank accounts are located and where your kids go to school. They’ll check where you buy resident sporting licenses and title your vehicles.
They’ll also look at where you own the most property and get most mail.
“It helps to have an attorney or accountant in one of the two states advise you,” Gersick said.
The state can even factor in where you attend church and maintain the most business contacts when deciding on residency.