The 183-Day Rule Explained

What is the 183-Day Rule?

The "183-Day Rule" is a widely used standard in tax law to determine if an individual is a resident for tax purposes. In simplest terms, 183 days represents the majority of the year (more than half). If you are physically present in a jurisdiction for this amount of time, governments generally assume you are a resident and may tax your worldwide income.

However, the rule is applied very differently depending on whether you are dealing with the IRS (Federal) or individual states like New York or California.

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1. State Statutory Residency (NY, NJ, CT, MA)

Most high-tax states use a concept called Statutory Residency. It is crucial to understand the difference between Domicile and Statutory Residency:

• Domicile is your one true, permanent home—the place you intend to return to (e.g., where you vote, have your driver's license, and family connections). You can only have one domicile.
• Statutory Residency is based purely on day count and maintaining a "Permanent Place of Abode" (a residence). You can be a statutory resident of multiple states.

Even if your Domicile is in a tax-free state like Florida or Texas, you can still be taxed as a full resident of a high-tax state if you fail the 183-day statutory residency test.

Common State Rules:

• New York / New Jersey / Connecticut: You are a statutory resident if you maintain a "Permanent Place of Abode" (a place to live) AND spend more than 183 days in the state.
• Massachusetts: Similar to NY, spending more than 183 days with a permanent place of abode triggers residency.
• California: California is stricter. Residency is presumed if you spend more than 9 months in the state, but you can be caught in as little as 6 months (183 days) if your stay is not for a "temporary or transitory" purpose.

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2. The IRS Substantial Presence Test (Federal)

The IRS uses a different version of the rule for international travelers, called the Substantial Presence Test. It is not just a simple count of the current year.

You are considered a US resident for tax purposes if you are physically present in the US on at least:

• 31 days during the current year, AND
• 183 days during the 3-year period that includes the current year, the previous year, and the year before that.

Note: The IRS uses a weighted formula: Days in current year (x1) + Days in prior year (x1/3) + Days in two years prior (x1/6).

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Comparison: How "Days" Are Counted

One of the biggest mistakes taxpayers make is assuming a "day" means spending the night. In many jurisdictions, this is false.

Jurisdiction	What Counts as a Day?	The "Minute Rule"
New York / NJ / CT	Any part of a day. If you step foot in the state, it counts.	Yes - 5 minutes for coffee counts as a full day.
IRS (Federal)	Any day you are physically present.	Yes - Presence at any time counts.
Exceptions	Transit (traveling through the state/country to get somewhere else) generally does not count, but you must prove it was solely for transit. *Medical exceptions exist for the IRS test (unable to leave due to medical condition arising while present), but strictly limited for states like NY (only in-patient hospital days usually excluded).	N/A

Burden of Proof & Audits

In a residency audit, the burden of proof is entirely on you. The tax authority will assume you were in their jurisdiction (and therefore a resident) unless you can affirmatively prove you were elsewhere. Gaps in your records are often counted against you.

Accepted evidence often includes:

• Cell phone tower records (Location history)
• Credit card swipes and receipts
• E-ZPass or toll records
• Passport stamps
• GPS Logs (Best Practice)

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