A New York Administrative Law Judge recently determined that a taxpayer was liable for income tax as a statutory resident of New York State and New York City for the entire 2014 tax year, as he maintained a permanent place of abode in New York City and was physically present in New York State and City on more than 183 days in 2014. This determination is an important reminder that establishing domicile during a tax year does not preclude the New York State Department of Taxation and Finance from treating a taxpayer as a statutory resident for the entire year.

New York uses two separate tests to determine residency for personal income tax purposes: domicile and statutory residence. In 2014, the taxpayer had a temporary job in New York and rented an apartment in New York City. In December of 2014, however, the taxpayer purchased an apartment in New York City and, at the end of 2014, the taxpayer’s temporary position became permanent. It was uncontested that the taxpayer became a New York domiciliary when he purchased the apartment. But the taxpayer argued that “because he was domiciled in New York upon the purchase of the . . . apartment, he cannot also be a statutory resident because he cannot be a statutory resident in the same tax year that he is domiciled in New York.” The ALJ, however, found that New York’s tax statutes allow a taxpayer to be treated as a statutory resident during the portion of the year when the taxpayer was not domiciled in New York.

Matter of Pilaro and Gorrie, DTA No. 829204 (Aug. 26, 2021).