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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I just took a job in Ohio and will live in an apartment during

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I just took a job in Ohio and will live in an apartment during the week and return on the weekends. I assume I will have to pay Ohio taxes. My wife will continue to live and work in Michigan, so she'll pay Michigan taxes. We have traditionally filed a joint return. Since I will spend the majority of time in Ohio should I establish a residence in Ohio? If so, how? And what implications will it have on our taxes next year? It may be beneficial for us to have my wife as a Michigan resident and me as an Ohio resident in order for our son to select a college in either state the following year and avoid out of state tuition.
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
Hello keith,

Even though you will be working in Ohio, you will still continue to file a tax return with the state of Michigan. The way it will work is that you will file a tax return with Ohio as a non resident of that state, and you will pay taxes on the income that you earned there.

You will also then file a Michigan return as a resident, but Michigan will give you a credit for the taxes you paid to Ohio, and thereby eliminate double taxation on the same income.

There is no benefit to you in establishing residency in Ohio from a tax standpoint.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.
Customer: replied 5 years ago.
Ok, I understand. Keeping the college tuition issue in mind, to avoid out of state fees if my son wants to attend a university in Ohio how do I establish a residency in Ohio? If we did that (me as a resident in Ohio, my wife as a resident in Michigan) would there be a disadvantage from a tax standpoint?
Expert:  Merlo replied 5 years ago.
Hello again keith,

There is no exact formula or checklist that is used in order to establish domicile in a certain state.    Domicile is actually based more on your “intent” of where you intend for your home to be.

However, if a situation were to arise where you were questioned about your residency, the state would look at a number of factors. The biggest factor is physical presence in the state. In other words, do you own or rent or otherwise maintain a regular place of residence in the state. Even though you may have a residence in another state, your domicile state should be your main place of residence, where you spend the majority of your time. Other factors considered in determining your domicile state would be such things as:

·     where your driver’s license is registered
·     where your vehicle is registered
·     where you are registered to vote
·     where you receive your mail
·     where your bank accounts are established
·     memberships with local organizations
·     local church affiliation

It will not particularly be a disadvantage to you from a tax standpoint to establish separate residency, as you will still only owe tax to the state where you physically worked and earned your income, but as you can see, it's not quite just as simple as renting an apartment. You would have to take some of the other steps listed above in order to have a good case that you intended for Ohio to be your domicile state.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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25+ years tax consulting. Specializing in returns for US citizens living abroad