14 Jun My son moved. Does he have to change his driver’s license?

Q. My son has been living in New York City and paying New York taxes for two years. He’s never changed his driver’s license to New York, though. Does he have to worry about the taxing authorities thinking he really lives in New Jersey?
— Concerned

A. We’re glad your son is managing to live on his own in these challenging times.

There are several items that determine state residency.

State taxing authorities will look at a variety of factors, including where you are registered to vote, where you live for most of the year, where your mail is delivered and which state issued your current driver’s license, said Michael Maye, a certified financial planner and certified public accountant with MJM Financial in Gillette.

But, he said, there is no “bright line” or one thing that makes a person a resident of one state or another.

“In your son’s case if everything else he does shows he is in fact a resident of New York City and New York State, then having a driver’s license from another state won’t automatically make him a resident of the state that issued the driver’s license,” Maye said.

But, Maye said, he should still change his driver license to reflect that he is in fact a resident of New York.

You didn’t say whether or not your son has a car.

“In my opinion, a bigger issue may be with his car insurance company,” Maye said. “On the annual renewal form they ask where you and the car are living. If he does have a car and is driving around in New York State and his license and car insurance indicate something else, that could create some issues for him if he is in a car accident.”

Maye said because many states are facing budgetary pressures, they are certainly on the lookout for individuals who claim to live elsewhere but in fact have not really left the state.

“If you decide to move out-of-state, make sure to line up everything correctly to avoid the fallout of having a state come after you because you didn’t cross your Ts and dot your Is.,” Maye said

He said it can make sense to seek legal counsel to make sure everything is done correctly, especially for high income earners who have homes in multiple states.

“Worst case, if you don’t follow rules and document where you are, it is possible to be considered a resident of more than one state, which is not the desired result,” Maye said. “An ounce of prevention is worth a pound of cure when it comes to state of residency.”

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This story was originally published on June 14, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.