Stipened housing eligibility, owing 2 homes, paying no state income tax

[stepaukob]

Hopefully this will clarify my original post.

I currently own a condo in a state that has an income tax of 5%. I am planning on purchasing a second home (which will be my primary home) in another state which has no state income tax.

Can I use my second home as my primary home? If travel near my original home I can reside there and still get the stipened housing. Also, with my second home being my new primary home, will I not have to pay state income tax?

Is this feasible? Can I travel near my second home and use it stipened housing? Will I be paying no income tax (my new home will be my primary residency in a state with no income tax) ?

Thanks for any information or advice. :nuke:

[ERRNTraveler, RN]

like several people said if your previous post, you should contact a tax advisor....

[Cymy]

I can't tell you whether you can claim your second home as your primary home, but I can tell you that you're almost certainly going to have to pay state income tax regardless if you work in a state that has an income tax.

I'll use Massachusetts and New Hampshire as an example.

If you live in NH, which has no income tax, and work in MA, which has 5.95% income tax, you still have to pay income tax to MA. However, if you perform your work duties while sitting in NH (for example, if you telecommute), then you don't pay income taxes on any money that you earn while you are physically in NH. If you work one day at home per week in NH and four days in MA, then you don't pay income tax on the 20% of your work that you do while in NH. The Massachusetts non-resident tax return form has a section for this type of situation.

I am not a CPA or otherwise licensed to give tax advice and you should certainly consult with a CPA the first year you do your taxes as a non-resident. However, I have been filing my and my husband's taxes like this for the last 10 years that I've lived in NH--my husband works on-call from home about one week per month, so we don't pay MA taxes on the money he earns during those weeks--it is taken out of his paycheck as if he lived in MA but we get it back after filing our MA taxes.

My non-CPA advice is don't try to do anything funky to attract the attention of the IRS or the tax department of the state in which you are working. If you want to establish residency in a state make sure that you live there for more than half the year, register to vote there, register your vehicles and any animals there, get a library card, have all your mail including bills sent there (you can pay the post office $10/wk to forward it via Priority Mail anywhere you want), and do anything else necessary to truly establish that you really live there and not in your original condo-home. This includes having the bills for your condo sent to your house in the other state, even if you're staying in your condo.

Good luck!

[stepaukob]

Thanks for the replies. I guess my main question was answered about paying taxes in the state that I am working regardless of where I live (after thinking about it more it does make sense that i will be paying in each state I work regardless of where i live).

As far as housing it makes sense to ensure that my primary residence can be proven and to make my old residence as non-existent as possible. Thanks again for the replies and speaking with a tax advisor will be a priority before making any purchases towards a second home.