Four recent Indiana rulings demonstrate the importance of the following factors in determining Indiana residency and therefore Indiana tax liability:
- Homestead credit
- Composite filings
- Days spent in Indiana
- Driver’s license
- Voter registration
- Intent of returning
- Using mom’s address
Specific rulings are summarized below:
- A taxpayer was not subject to Indiana personal income tax as a resident for the tax year 2012 because he did not avail benefits of the homestead exemption claimed on his Indiana residential property for that period. In addition, he showed that three LLCS of which he was a member, had filed Indiana composite returns on his behalf.
- Another taxpayer’s protest regarding tax assessments for Indiana personal income tax was denied for the year 2014 because she admitted that she was in Indiana for more than 183 days during the year and therefore was determined to be an Indiana resident. The taxpayer had concurrent ownership of Florida and Indiana homes.
- Taxpayers were liable to pay Indiana personal income tax for the tax year 2011 because they failed to establish that they had an intent to abandon their Indiana domicile . Although the taxpayers argued that they were domiciled in another state since moving in 2007, had obtained their driver’s licenses and registered their vehicles as well as their voter ID in the other state, the Department of Revenue found that the taxpayers took the homestead deduction on their Indiana property in 2011.
- A taxpayer was liable for Indiana personal income tax for the 2011 tax year because he was unable to establish that he had abandoned his Indiana domicile when he moved to another state under a temporary working visa. Generally, to change a domicile, a taxpayer must abandon his/her current domicile with no intention of returning and concurrently acquire a new domicile as a permanent place of abode. While the taxpayer had shifted his residence to the other state in 2005 for the purpose of work, he maintained his Indiana driver’s license and continued to use his mother’s address for tax purposes in 2011.