Navigating State Taxes as an Expat – Are You Still on the Hook?
Many U.S. expatriates think they’re off the hook for state taxes once they move abroad—but that’s not always the case. Depending on the state you lived in before moving overseas, you might still be considered a resident for tax purposes.
🏛️ Why Some States Still Tax Expats
States like California, New York, New Mexico, and Virginia are notorious for their strict residency rules. Even if you physically leave, you may still owe state taxes if:
- You maintain a home or mailing address there
- You keep a driver’s license or voter registration in the state
- You return regularly or maintain financial ties
These states may assume continued residency until you actively sever ties.
✂️ How to Break State Residency
To avoid unwanted tax bills, it’s critical to formally end your tax residency. Steps include:
- Selling or renting your state property
- Changing your mailing address
- Registering to vote elsewhere
- Cancelling your driver’s license
- Establishing legal residence in your new country
🧾 File a Final State Return
In many cases, you’ll want to file a final part-year return the year you leave and notify the state of your new non-resident status.
⚠️ Penalties for Not Filing
If your former state finds you haven’t filed or paid taxes—and you still have ties—you could face back taxes, interest, and penalties. Some states may even audit expats years after they’ve left.
💡 Work With a Professional
State tax rules for expats can be complex and vary widely. A mistake can cost thousands in back taxes. Let the team at Expatriate Tax Returns help you determine your status and file correctly.
