State income tax nexus for individuals is determined by two separate concepts that operate independently: domicile (your permanent home, where you intend to return) and statutory residency (being present in a state for a minimum number of days while maintaining a permanent place of abode there). Either one creates full resident tax liability. Remote work exploded the complexity - an employee working from home in a different state than their employer creates tax obligations in both states, often without the employee realizing it. The convenience of employer rule makes it worse for New York workers specifically.
Every individual has exactly one domicile at any given time - their permanent legal home, the place they intend to return to after absences and where they consider their true home. Domicile is a facts-and-circumstances determination that follows the person, not the property. Changing domicile requires both physically relocating to the new state and forming the intention to make it your permanent home. Both elements must be present.
States look at a wide range of factors when evaluating domicile claims, particularly when an individual claims to have moved from a high-tax state:
Even if an individual is not domiciled in a state, they can become a statutory resident subject to full resident income tax if they maintain a "permanent place of abode" in the state and spend more than a threshold number of days there. The most common threshold is 183 days, but it varies by state.
| State | Statutory Residency Threshold | Permanent Place of Abode Required? | Notes |
|---|---|---|---|
| New York | More than 183 days | Yes - must maintain a permanent place of abode in NY | 183 days = resident; must maintain PPA. Days counted by midnight rule. Most aggressively enforced. |
| California | No separate statutory residency threshold - domicile controls, but presence creates presumption | N/A | CA has no 183-day rule; residency is based on domicile. Prolonged presence can support residency finding on facts. |
| New Jersey | More than 183 days | Yes - must maintain a permanent place of abode in NJ | Similar to NY. Common for NJ property owners who relocate but keep NJ home. |
| Connecticut | More than 183 days | Yes | 183-day threshold. Often catches NY workers with CT vacation homes. |
| Massachusetts | 183 days or more | Yes | 183 days exactly = resident. Maintains a permanent place of abode. |
| Illinois | More than 182 days | Yes | 183 days = resident. Permanent home required. |
New York has one of the most aggressive and consequential rules in state income taxation: the convenience of employer rule. Under this rule, a nonresident employee of a New York employer who works from home (or from another state) must still pay New York income tax on the days worked remotely - unless working out of state was a necessity of the employer's business rather than a convenience to the employee.
A California resident works remotely for a New York City company. They physically work in California 200 days and visit New York 50 days per year. Under normal allocation rules, they should pay California tax on 200/250 = 80% of income. Under New York's convenience rule, the 200 California days are treated as New York days because working from California was for the employee's convenience, not a business necessity - New York taxes 100% of income. California also taxes the California-worked days. The result is potential double taxation of the California days.
States that apply similar convenience of employer rules as of 2026: New York, Delaware, Nebraska, Pennsylvania, and Connecticut (for CT employees of out-of-state employers). The rule disproportionately affects high earners who work remotely for New York employers while living in lower-tax or no-tax states.
A remote employee who works from a state different from their employer's state typically owes income tax in: (a) their state of domicile (on all income), and (b) the employer's state if the convenience rule applies, or alternatively the state where work is performed if the convenience rule does not apply. A credit for taxes paid to other states usually - but not always - eliminates double taxation.
For employees who work in multiple states throughout the year, a day-counting log is essential. Contemporaneous records of where work was performed each day are the only reliable defense in a state residency audit. Hotel receipts, meeting records, flight records, and client visit logs all support the day count.
High-tax states audit domicile change claims aggressively, particularly when the claimed new domicile is a no-income-tax state like Florida, Texas, or Nevada. A successful domicile change requires a sustained pattern of behavior that genuinely reflects a change in permanent home - not just establishing minimum connections in the new state while maintaining meaningful ties to the old one.
Practical steps for a defensible domicile change from a high-tax state: