What is Domicile? Taxes From A to Z®
Domicile is your permanent legal home—the place you consider home and intend to return to, even if you’re temporarily living somewhere else. (It’s a bit simplistic, but we often say that your residence is where you live, but your domicile is where you intend to die.)
One domicile at a time
You can have more than one residence, but generally only one domicile at a time. Your domicile isn’t necessarily determined by where you spend the most time or where you happen to own a house. States may consider many factors to determine where you really call home, including where you vote, hold a driver’s license, register your car, and maintain important personal and financial ties. Simply buying a house in a lower-tax state—or spending part of the year there—doesn’t automatically change your domicile.
Why does it matter?
Domicile can affect whether a state treats you as a resident for income tax purposes, and it can also play a role in estate and inheritance taxes. The rules vary by state, and some states use separate statutory residency tests in addition to domicile. That’s why taxpayers who split their time among states, move during the year, or maintain homes in more than one state should pay attention to both where they live and where the law considers their permanent home.
