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Lev
Lev, Tax Advisor
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Experience:  Taxes, Immigration, Labor Relations
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my last ´´permanent´´ address was in state of maine however,

Customer Question

my last ´´permanent´´ address was in state of maine however, I now no longer consider that as such and in say the last 2 years I lived in maine for 5 months.
I consider my permanent address as the dominican republic. Last year I withdrew $90,000 dollars from my esop.

H&R Block are telling me I have to file a maine 1040 and pay them $1800.00
What does the law say. Thankyou...WT
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

Hi and welcome to Just Answer!

I assume that you are using H&R Block software - correct?

Thus - you provided some information that made it to "believe" you are a resident of Maine.

However - you did not mention which exactly information you entered about Maine.

 

If you are a Maine resident for the entire tax year, you must pay Maine tax on all of your taxable income regardless of its sources - wages, investment income, interest income, pension, and dividends among other things.

Please see for reference - http://www.maine.gov/revenue/incomeestate/guidance/res_pamphlet.pdf

I extracted some places that are related to your situation.

A "resident" taxpayer is a person who is:

-- domiciled in Maine (a "permanent legal resident"), or
-- a statutory resident.

Even if you are domiciled in another state, you may still be taxed as a Maine resident if you are a "statutory resident." You are a statutory resident if:

1. you spent more than 183 days in Maine during the tax year (any portion of a day
is counted as a full day), and

2. you maintained a permanent place of abode in Maine for the entire tax year.

Q. Each year, I live in Maine for five months and in another state for seven months. Does this mean I am not a Maine resident?

A. Not necessarily. If you were domiciled in Maine before you began spending time in the other state, you continue to be a full-year Maine resident unless, or until, you have taken steps to establish domicile in the other state or country.

What might be steps to establish domicile in Dominican Republic?

-- get residency status

-- apply a valid Dominican driver's license

-- pay income tax on worldwide income from investments abroad after the third year of residency

-- register your vehicles
-- keep active bank accounts

etc...

Customer: replied 2 years ago.
I was in maine for approx. 5 months
What constitutes legal residency
Expert:  Lev replied 2 years ago.

Each state or country has its own residency requirements.

According to Maine law - you are a "resident" for tax purposes if:

-- domiciled in Maine (a "permanent legal resident"), or
-- a statutory resident.

You are a statutory resident if:

1. you spent more than 183 days in Maine during the tax year (any portion of a day
is counted as a full day), and

2. you maintained a permanent place of abode in Maine for the entire tax year.

If you were a resident of Maine - you will be considered resident unless you establish domicile in Dominican Republic.

Just spending time outside Maine is not enough to become a nonresident for tax purposes.

The first question would be - do you have a Maine driver's license? If you changed your residency - you need to replace the Maine driver's license within 6 month.

Then - what is your status in Dominican Republic - are you a legal resident or you entered on tourist visa?

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