Breaking Ties With Massachusetts

No, if your residence is overseas, your residence is overseas. A state considers you a resident if you plan to return, so you need to, as you said, break the ties, sell your Mass. house, get a driver's license in the other country and turn in your Mass. license, and otherwise make it clear that your new residence is really your residence.

Expatriates are allowed to vote in Federal elections in the last US place where they lived, but that's not the same as being a resident. You don't get to vote in local elections, for example.

R's, John

It varies by state, not nearly as simple as stated above. Your federal tax status and state tax status are not necessarily the same.

, so you need to,

Residency and domicile are two different concepts, and both will probably come into play. Please consult a professional who is experienced in this area of taxation.

Gary (or Abby, not sure which):

Please consult a professional who is experienced in this area of taxation.

Some states will consider you a resident for tax purposes until you have established a residence *in another state*. That typically requires actually moving there, changing all your paperwork (voter registration, drivers and other licenses, etc.) to the new state, breaking connections with the old state, and residing there for some period (normally "indefinitely") with no provable intent to return to the former state. (E.g. New York will consider you a resident if you retain ownership of real property to which you intend to return, even if you have actual residence in another state.)

Seth

That is consistent with what the local tax guy told me. I was not aware it was a state law not a national. Taxachussetts will tax you if it can find any reason to do so.

I guess I will need to look at each state independently to see what is required for a driver's license and voter registration. (Any hints appreciated) We cannot get Costa Rican driver's licenses until we get visas which can take a while. We will be selling this house and have absolutely no intention of ever returning.

Gary

If I were you, I wouldn't claim I was a Costa Rican resident until I had a visa that allowed me to live in Costa Rica. That's the sort of thing that can lead to long expensive legal battles with tax authorities.

I'd also think hard about claiming to be a resident of another state unless you actually plan to live in that state between the time you leave Mass. and the time you move to C.R. Again, if they get wind of the fact that you don't actually live there, keeping in mind that states want you to be a resident before they will let you register to vote or issue you a driver's license, it would smell pretty bad.

How about waiting until you actually move to C.R., then change your residence to there? In the meantime, as others have suggested, find an expert in expat taxation who can give you more reliable advice.

R's, John

I posted earlier that MA has a process for ending your residency for an overseas move. I'm not sure of the exact procedure, but when my brother moved to Uganda, he converted his personal residence to a rental property. He was able (somehow) to convince the MA tax authorities that he would not be returning to MA and should pay tax on the rental income as a nonresident of the commonwealth.

You may want to have your tax advisor do more research.

Ira Smilovitz