Moving Abroad Doesn't End Your State Tax Residency — California and New York Can Still Tax You on Worldwide Income.

No — and this is the most important thing to understand. Moving abroad does not automatically terminate state tax residency. You must affirmatively establish a new domicile outside the state by severing the ties the state uses to claim residency — driver's license, vehicle registration, bank accounts, voter registration, property — and establishing new ties elsewhere. California and New York are the most aggressive states in pursuing this question. Simply living abroad for months or years without taking these formal steps leaves your prior state's claim intact.

Domicile is your permanent legal home — the place you intend to remain indefinitely or return to when away. You can only have one domicile at a time. For state tax purposes, your domicile state taxes your worldwide income, regardless of where you physically live. If California remains your domicile after you move to Singapore, California taxes you on Singapore income at up to 13.3% — on top of whatever Singapore levies. Breaking domicile requires establishing a new permanent home somewhere else and abandoning the intention to return to your prior state. It is a facts-and-circumstances test, not a bright line.

The California Franchise Tax Board (FTB) uses a multi-factor domicile test that examines 19+ factors: where you maintain your primary home; where your spouse and children are; where you work and maintain professional licenses; where your vehicles are registered; where you bank; where you are registered to vote; where you hold club memberships and maintain social ties; where you keep valuables and personal property; and where you spend the most time. The FTB places the burden of proof on the taxpayer — you must demonstrate, with documentation, that you have established a new domicile elsewhere and abandoned California as your permanent home. The FTB can audit residency going back 4 years (or indefinitely if no return was filed for the disputed year).

Yes — if California still considers you a domiciliary or resident, it taxes your worldwide income, including your foreign salary, foreign business income, and foreign investment income. The critical additional point: California does not conform to the federal Foreign Earned Income Exclusion (FEIE, Form 2555). Income you excluded from your federal return using Form 2555 is still subject to California income tax if you remain a California resident. At California's top rate of 13.3%, this can mean $10,000–$15,000 in annual California tax on income that generated zero federal income tax. This is one of the most financially significant state tax issues for expats who moved from California.

New York's statutory residency rule taxes you as a full New York resident — even if you are NOT domiciled in New York — if you meet both conditions: (1) you maintain a "permanent place of abode" in New York, and (2) you spend more than 183 days in New York during the tax year. A permanent place of abode is any dwelling you maintain and have access to, including an apartment rented in your name, a room in a family home, or any property available for your personal use. The danger for expats: if you keep a New York apartment (even renting it to others when you are abroad) and spend more than 183 days in New York during any year, New York treats you as a full resident for that year — taxing your worldwide income. Days in New York are counted for any portion of a day you are physically present in the state.

Potentially yes — depending on how the property is held and used. In California, maintaining a home that is "available for your personal use" is one of the strongest indicators of continuing domicile — even if you rent it out, if the arrangement is not truly arm's-length (e.g., renting to a family member at below-market rate, or retaining the right to stay there when you visit), the FTB can treat it as your California home. In New York, keeping an apartment or home that is available for your use constitutes a "permanent place of abode" — which, combined with 183+ days in New York, triggers statutory residency. The safest path: sell the property before establishing your new domicile abroad, or rent it at full arm's length on the open market with no personal use rights.

For expats moving from California, New York, or other high-tax states, establishing domicile in a no-income-tax state (Texas, Florida, Nevada, Wyoming, Washington, South Dakota, or Alaska) before moving abroad is a legitimate strategy used by many Americans who move overseas. If done correctly, it breaks the high-tax state's claim and replaces it with a state that has zero income tax — meaning your foreign income has no state tax exposure at all. "Correctly" means genuinely establishing domicile: obtaining a driver's license, registering a vehicle, having a real residential address (not just a P.O. box), spending meaningful time there, and updating your address everywhere. Mark advises on this strategy as part of pre-departure planning. It requires real steps — not just paperwork — but for high earners moving from California or New York, the annual tax savings can be substantial.

In the year you move abroad, you file a part-year resident state return for your prior state. For California, this is Form 540NR (California Nonresident or Part-Year Resident Income Tax Return). For New York, it is IT-203 (Nonresident and Part-Year Resident Income Tax Return). The part-year return reports income earned through the date of departure as taxable by the state, and income earned after departure as non-taxable (unless it is state-source income from the prior state). Filing this return promptly — and accurately documenting the departure date — is important for establishing the official record of when residency ended. Failing to file a part-year return in the year of departure is a red flag that states interpret as continuing residency.

Yes — California sources RSU income based on where you performed services during the vesting period, not where you live when the shares vest. If you performed work in California during the period between the RSU grant date and the vesting date, the portion of the RSU income attributable to California workdays is taxable by California — even after you have moved abroad and successfully broken California domicile. This is called California's "source-based" RSU taxation, and it can continue generating California tax obligations for years after departure. Mark prepares California non-resident returns (Form 540NR) to report and pay tax on this California-source RSU income, while correctly excluding non-California-source income.

California's standard statute of limitations for residency audits is 4 years from the later of the return due date or the date filed. However — and this is important — if no California return was filed for a given year (because you believed you were no longer a California resident), the statute of limitations never starts running. California can audit indefinitely for years with no return on file. This means an expat who moved abroad in 2019 and filed no California return after that year can face a California residency audit in 2025 or 2026 covering all years since departure. Proactively filing a part-year return in the year of departure — and filing non-resident returns for California-source income in subsequent years — starts the clock running on the statute of limitations and demonstrates ongoing good-faith compliance.

Possibly — this is one of the most significant domicile factors in California's analysis. Where your spouse and children live is a major indicator of where your "closest connections" are, which is central to California's domicile determination. If your spouse and children remain in California with no documented plan to join you abroad, and you return to California regularly to be with them, the FTB will likely assert that California is still your domicile. This does not mean it is impossible to break California domicile when a spouse remains in California — but it is significantly harder and requires strong documentation showing that your permanent home and primary ties are genuinely elsewhere. Mark evaluates the specific facts of these situations during the free consultation.

A California FTB residency questionnaire (FTB Form 4600 or similar) is a formal information request that initiates a residency audit. You are required to respond — ignoring it results in the FTB proceeding with a proposed tax assessment. The questionnaire asks for detailed information about your living arrangements, ties to California, days spent in California, and out-of-state ties. Mark prepares the written response — explaining your domicile break, providing documentation of the steps taken, and presenting your facts in the most favorable and legally accurate way. A well-organized, well-documented response at the questionnaire stage typically resolves most California residency audits without escalation to a formal examination. Contacting Mark as soon as the questionnaire arrives — not after the deadline — is critical.