As far as the taxman is concerned, home is where the heart is.

That’s the difficult message accountants and lawyers are delivering to clients these days, after the Covid-19 pandemic scattered New Yorkers across the country. The city levies its own income tax of as much as 3.876% in addition to the state’s top rate of 8.82%, and people often assume that they can avoid paying by spending more than half the year somewhere else. Nope.

In reality, New York state uses five primary criteria to determine a taxpayer’s residency status: The home they live in, their business ties, where they spend their time, family connections and the so-called “teddy bear test,” which is where they keep the items near and dear to them like artwork, heirlooms and pets.

Many families that recently left New York, the epicenter of the virus’s first U.S. wave, had merely loaded up their cars or hopped on planes with a couple of suitcases.

“There’s more to changing your residence from New York than just staying out of state for a period of time,” said Yvonne Cort, a partner at law firm Capell Barnett Matalon & Schoenfeld. “You need to make the new place your home — with all the sentiments that go with that word.”

To be considered a non-resident for tax purposes, people need to prove they uprooted their lives and cut ties with New York in a way that won’t be easy to undo in a year or two. Getting a driver’s license or registering to vote somewhere else generally isn’t enough. Enrolling children in a new school, however, could improve your case.

“Nobody wants to disrupt their kids’ lifestyle. That’s more important than taxes to most parents,” said Wayne Berkowitz, a lawyer and CPA at Berdon LLP, an accounting and advisory firm in New York. “If you don’t have school-age children, it’s going to be quite a bit easier” to change residency.

Still, some New Yorkers have successfully avoided payments by moving to other states. Last year, billionaire Carl Icahn — a native of Queens — disclosed he was moving both his home and business to Florida, which doesn't have an income tax. About 63,000 New York State residents moved to Florida in 2018, according to the most recent U.S. Census Bureau data.

But proving you’ve left New York is much more difficult if you still own or rent a place in the city — and many would-be movers tell advisers they don’t want to sell at the moment. “The market in New York City is not exactly hot right now,” said Jennifer White, a partner at law firm Reed Smith in New York.

Another issue is that audits of 2020 aren’t likely to occur for a few years — by which time many taxpayers could undercut their case by returning to their pre-Covid haunts.

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