Connecticut Tax Residency Rules

Connecticut State Tax Residency Summary

Connecticut uses a somewhat standard two-part test to determine whether an individual is a state resident for income tax purposes. The first test is tied to an individual’s domicile (i.e., permanent legal residence). The second is tied to whether the individual permanently maintains a residence in Connecticut (i.e., permanent place of abode) and the number of days he or she spent in Connecticut during the tax year ("Statutory Residency Test"). For Connecticut gift and estate tax purposes, Connecticut focuses primarily on just the domicile test.

Under these rules, an individual is a resident of Connecticut for a tax year if he or she meets either of the following conditions:

• was domiciled in Connecticut for the entire tax year, subject to certain exceptions described below; or
• was not domiciled in Connecticut but maintained a “permanent place of abode” in Connecticut during the entire year and spent more than 183 days in Connecticut during the year (CGS § 12-701(1); Conn. Agencies Regs. § 12-701(a)(1)-1)

An individual may be a Connecticut resident for income tax purposes, and taxable as a resident, even though he or she would not be deemed a resident for other purposes. Residents are taxed on income from all sources within and outside Connecticut. Nonresidents, on the other hand, are taxed only on the income they derive from Connecticut sources. (e.g., Connecticut work projects or businesses or Connecticut real estate interests).

Domicile Definition

An individual’s domicile is generally the place he or she intends to have as a permanent home and to which he or she intends to return whenever away. An individual can have only one domicile even though he or she has more than one place to live.

The individual’s domicile does not change until he or she moves to a new location and intends to make his or her permanent home there. If the individual moves to a new location but intends to stay there only for a limited time (no matter how long), his or her domicile does not change. This also applies if the individual is working in a foreign country. Domicile is generally not affected by an individual’s service in the armed forces.

Exceptions to Domicile Rule

Certain individuals are not deemed residents even though they are domiciled in Connecticut. Under Connecticut Department of Revenue Service ("DRS") regulations, an individual domiciled in Connecticut is a resident for income tax purposes for a specific tax year unless he or she satisfies all three of the following requirements:

• maintains no permanent place of abode in Connecticut during the year;
• maintains a permanent place of abode outside Connecticut during the year; and
• spends a total of 30 days or less in Connecticut during the tax year. Conn. Agencies Regs. § 12-701(a)(1)-1.

Factors Considered in Domicile Determinations

DRS considers a multitude of factors in evaluating an individual’s domicile, including his or her real estate, social, business, and civic connections to Connecticut. DRS regulations enumerate the following non-exclusive list of items that DRS considers in domicile determinations:

1. location of domicile for prior years;
2. where the individual votes or is registered to vote;
3. status as a student;
4. employment location and classification (i.e., temporary or permanent);
5. location of newly acquired home, whether owned or rented;
6. present status of former home (i.e., whether sold, offered for sale, rented, or available to rent);
7. whether the individual claimed a Connecticut veteran’s exemption for real or personal property tax;
8. other real property ownership;
9. jurisdiction from which a valid driver’s license was issued and type of license;
10. jurisdiction from which any professional licenses were issued;
11. location of the individual’s union membership;
12. jurisdiction from which any motor vehicle registration was issued and the actual location of the vehicles;
13. whether the individual purchased resident or nonresident fishing or hunting licenses;
14. whether the individual filed a resident or nonresident income tax return with Connecticut or another jurisdiction;
15. whether the individual has fulfilled the tax obligations required of a resident;
16. location of any bank accounts, particularly the most active checking account, and other transactions with financial institutions;
17. location of the individual’s place of worship;
18. location of business relationships and the place where business is transacted;
19. location of social, fraternal, or athletic organizations or clubs, or a lodge or country club, in which the individual is a member;
20. address where mail is received;
21. percentage of time (excluding work hours) that the individual is physically present in Connecticut versus other jurisdictions;
22. location of jurisdiction from which unemployment compensation benefits are received;
23. location of schools at which the individual or his or her immediate family attend classes, and whether resident or nonresident tuition was charged;
24. statements made to any insurance company concerning the individual’s residence;
25. location of most of the individual’s and his or her family’s professional contacts (e.g., physicians and attorneys); and
26. location where pets are licensed (Conn. Agencies Regs. § 12-701(a)(1)-1).

Permanent Place of Abode

Definition

DRS regulations define “permanent place of abode” as a residence the individual permanently maintains, regardless of whether they own it; it generally includes a residence the individual’s spouse owns or leases. A place of abode is not considered permanent if it is maintained only during a temporary stay (e.g., if an individual is assigned to his or her employer’s Connecticut office for a fixed and limited period and uses an apartment in Connecticut during this period).

A permanent place of abode generally excludes a:

• dwelling place the individual owns and leases to others (who are not related by blood or marriage) for a period of at least one year;
• “mere camp or cottage” used only for vacations; and
• barracks, motel room, or other place that does not contain facilities ordinarily found in a dwelling (e.g., cooking or bathing facilities).

Rules for Determining Days Within and Outside of Connecticut

An individual is considered a Connecticut resident for income tax purposes under the Statutory Residency Test if he or she maintained a permanent place of abode in Connecticut during the tax year and spent more than 183 days in Connecticut.

A Connecticut day for purposes of the 183 day count portion of the Statutory Residency Test includes any part of a day, except for a part of a day during which an individual is in Connecticut while in transit to another destination (for example, driving through the state or traveling into Connecticut to or from an airport). The burden of proof is imposed on individuals to provide records in any DRS examination to substantiate that they spent 183 days or less in Connecticut.

Burden of Proof and Record Keeping Requirements

You must keep and have available for examination by DRS adequate records to substantiate your day counts and domicile status. DRS regulations expressly provide that the burden of proof is on the taxpayer to establish his or her residency status. Conn. Agencies Regs. § 12-701(a)(1)-1). In the event of a DRS audit or examination, you will need to provide detailed records showing your location on a day-by-day basis. Acceptable records include, but are not limited to, credit card statements, toll records, appointment books/calendars, and other contemporaneous documents that show your location on a daily basis. Use the Domicile365 App to record a detailed day-by-day log of your location that is essential to substantiate your residency status. The Domicile365 App makes it easy to track your days in Connecticut and other states for tax residency purposes.

Conclusion

Understanding Connecticut residency rules is crucial for managing day counts, tax planning and compliance. The burden of proof is on you to show where you were.

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