Basics of Residency and Domicile Day Count Location Tracking

Residency testing varies by jurisdiction. Some jurisdictions (for example, the United States, U.K., China, etc..) look solely at your day count in the jurisdiction for the year (or over the course of a number of years (e.g., up to 3 years in the U.S., 6 years in China)). Others presume that you are a resident, at least for tax purposes, if you are present in the jurisdiction for some minimum day count (often 183 or more days during the year), but may still find that you are a resident even if you spend fewer than 183 days in the jurisdiction during the year if you have or maintain other connections with the jurisdiction (intent to return, residence, driver's license, voters registration, mail, pets, doctors, lawyers, accountants, etc...). Day count testing can be relevant for other reasons such as establishing presence to support a divorce filing (In over half the states in the U.S., residency to support a divorce filing is established in six months or 180 days. Other states require presence in state for 60 to 90 days) or taking advantage of local creditor protection provisions or property tax reductions or exemptions.

Residency in a Country -- Presence of 183 or more days in jurisdiction.

You are considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting all the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year. If a person fails this substantial presence test, a person can still be treated as a nonresident of the U.S. if he or she maintains a closer connection to a foreign country under special rules.

In the United Kingdom ("UK"), whether you are a UK resident usually depends on how many days you spend in the UK in the tax year (fiscal year from April 6 to April 5 the following year). You’re automatically resident if either: (1) you spent 183 or more days in the UK in the tax year or (2) your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year You’re automatically non-resident if either: (1) you spent fewer than 16 days in the UK (or 46 days if you have not been classed as UK resident for the 3 previous tax years) or (2) you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working.

In the case of Canada, you are a deemed resident for tax purposes if you are in Canada for 183 days or more (the 183-day rule) in the tax year, do not have significant residential ties with Canada, and are not considered a resident of another country under the terms of a tax treaty between Canada and that country. When you calculate the number of days you stayed in Canada during the tax year, include each day or part of a day that you stayed in Canada. These include: (1) the days you attended a Canadian university or college, (2) the days you worked in Canada and (3) the days you spent on vacation in Canada, including on weekend trips. If you lived in the United States and commuted to work in Canada, you do not include commuting days in the calculation.

Day count tracking is also relevant in establishing that an individual is a bona fide resident of a U.S. territory/possession (which often yields tax benefits to U.S. Citizens). These possessions and territories include American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, and Puerto Rico. In general, an individual will be considered a bona ride resident of a U.S. territory or possession if he or she (1) is physically present in the territory for 183 days during the taxable year, (2) does not have a tax home outside the territory during the tax year, and (3) does not have a closer connection to the U.S. or a foreign country. However, U.S. citizens and resident aliens are permitted certain exceptions to the 183-day rule.

State Statutory Residency Tests

At the state level in the United States, certain states presume that you are a statutory resident if you are present in the state for 183 days or more during a year (basically six (6) months). These states include: Connecticut, Delaware, District of Columbia, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, North Carolina, Pennsylvania, Rhode Island, Utah, Virgina and West Virgina. New York deemed an individual a statutory resident of New York if the individual is present more than 183 days in New York provided the individual maintains a permanent abode in New York. What constitutes a permanent abode in New York is a factual question and the subject of recent litigation. See In Re Obus vs New York State Tax (Sup. Ct., 3rd Appellate Division 6/30/2022) (New York State appeals court held that a NJ resident who worked in and commuted to NYC would not be deemed a statutory resident of New York based on limited use of a vacation home located in upstate New York when taxpayer didn't keep personal items in vacation home) New Mexico is currently 185 days. Hawaii & Oregon are 200 days, and North Dakota is 210 days. For more information on statutory resident status in each of the 50 states, see statutoryresident.com

The burden of proof is generally on a person to prove where they were during every day of the calendar year for statutory and residence tax purposes. For example, review Matter of Thomas P. and Kathleen H. Puccio, DTA No. 822476 (N.Y.S. Div. of Tax App., Jan. 27, 2011) , where the court evaluated a long list of disputed days and ultimately held that the taxpayer had not carried the burden of proof on the issue.

In another illustrative case, Matter of Julian Robertson, DTA No. 822004 (N.Y.S. Div. of Tax App., September 23, 2010), the famed hedge fund manager was able to prevail by establishing his whereabouts. In that case, it was agreed that the taxpayer was present in New York City on 183 specific days and was not present in New York City on 179 specific days (non-NYC days). The stipulated specific NYC days and non-NYC days totalled together 362 days, thus leaving the sole issue in the case whether the taxpayer was able to establish that none of the four other days was a NYC day. At stake for one tax year was almost $27 million in potential New York City. Fortunately for Mr. Robertson, he was able to convince the tax tribunal that he was not in NYC on any of those 4 days. The case is replete with testimony from individuals and documentary evidence. Had he had available an app like Domicile365 that tracked his location on a daily basis, presumably his burden of proof would have been substantially easier to carry.

When does a day count towards residency day counts?

It is also helpful to know whether every day in a jurisdiction counts or not. For example, some jurisdictions provide that time spent in an airport catching a connecting flight does not count. See N.Y. Comp. Codes R. & Regs. Tit. 20, 105.20(c). Some states only count a day if you are present in the state over night. Some states such as Maryland provide that a continuous period of 24 hours cannot be counted as more than one day. Other exceptions also exist (for medical visits, etc...). In the United Kingdom, a day only counts as a general matter if a person is in the United Kingdom at midnight and is not otherwise in transit. Each jurisdiction is different. Many jurisdictions do not have any clear or easy to find rules. When in doubt, assume any portion of a day counts. The Domicile365 App generally counts any presence in a jurisdiction during the day as a day for counting purposes; however, the App also has additional functionality to alternatively only count days when you are present in the jurisdiction overnight. This permits you to view your day counts using both approaches.

In cases involving employers, over half the states in the United States require state level income tax withholding if an employee works 1 day or more in the state. Other states have day thresholds before withholding is required. For example, New York only requires withholding for employees when the employee has worked more than 14 days in the state. New York State TSB-M-12(5)I. Even if an employer is not required to withhod, states sometimes require the payment of tax from nonresidents at lower thresholds.

We created the Domicile365 App to assist you in tracking these day counts. Use the app to help carry your burden of proof and evidence what your day count in each jurisdiction is. Learn more here .