As the seasons change, I often have conversations with clients on the issue of moving away from Minnesota. The reasons for leaving vary, from climate and weather to being closer to children and family to Minnesota’s income and estate taxes.

For those concerned with the state’s income and estate taxes, a part of these conversations will focus on whether the person will be considered a resident of Minnesota for tax purposes if they move.

Minnesota’s income and estate tax rules determine residence using the 183-day rule. A person is considered a resident of Minnesota if they are located in the state for 183 days of the year — any part of a day will count as a full day — and they or their spouse own, rent, maintain or occupy an abode in Minnesota.

If the person is living part of the year in Minnesota with the intent of being considered a resident of another state, it is important to keep accurate records to show residence. The key is to show that the person established a physical presence in that new location with the intent to remain there permanently.

Factors establishing residency

The following are some factors that will be considered when determining whether residence has been established:

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If a person is a Minnesota resident, all their income will be taxed by Minnesota. If they are a nonresident of the state, they will pay Minnesota tax on income earned in Minnesota. As it relates to the Minnesota estate tax, if a person is a nonresident but owns assets located in Minnesota and their federal taxable estate exceeds $3 million, they will be required to file a Minnesota estate tax return for a nonresident.