- On September 20, 2016
Effective April 19, 2013, new rules on switching residency out of Illinois. The Illinois Department of Revenue enacted new regulations intended to prevent individuals who reside in both Illinois and another state for a portion of the year from being considered a resident of the other state. The goal is to make these individuals subject to Illinois’s income and inheritance tax, which could have a considerable financial impact. The new rules create the following presumptions:
- That an individual receiving an owner-occupied homestead exemption for Illinois property is a resident of Illinois.
- That an individual who is an Illinois resident in one year is also a resident the following year, if present in Illinois more days than present in any other state.
These presumptions and additional factors were implemented by the IDOR to prevent “snowbirds” from claiming residency in states like Florida to avoid Illinois tax. Although the IDOR has created more barriers, the new regulations can be overcome with proper legal guidance. In some states, like Florida, there is a statute authorizing individuals to designate Florida as their state of residency. Designating residency in another state can help individuals make a case for non-Illinois residency. However, declaring residency in another state does not guarantee you will be able to avoid Illinois’ income tax, but other options are available to strengthen a case against Illinois residency.
If you reside in Illinois and another state for a portion of the year, you may need legal assistance to ensure non-residency status in Illinois to avoid a higher income tax. The attorneys at Kelleher & Buckley, LLC are knowledgeable of all new regulations affecting Illinois snowbirds. Call us at 847-382-9130 for more information about all new regulations affecting snowbirds and the legal options available to avoid a higher income tax.