Do US expats pay state income tax?
Often not, but only if you’ve genuinely stopped being a resident of the state you left. The IRS taxes you wherever you live; states tax residents on worldwide income and nonresidents only on income sourced there. So the whole question is whether you’re still a resident, and moving abroad doesn’t settle it by itself.
Most states let you go once you’ve clearly moved. A handful are “sticky” and keep treating you as a resident until you show a permanent home elsewhere. That’s where we see expats caught, sometimes years later, with a bill on salary they earned in London.
Residency is fact-specific: every state has its own statute and case law, and the answer turns on the whole picture of your life. Treat this as a map, not a ruling on your facts.
Domicile vs statutory residency: how does a state keep you?
Most income-tax states have two ways to treat you as a full-year resident.
Domicile is your one permanent home, the place you intend to come back to. You have exactly one at a time, and you don’t lose the old one by leaving. You lose it by acquiring a new one: living somewhere else and intending to stay indefinitely. A foreign country counts. The catch is that intent is proven by what you do, and a two-year assignment with a return date looks like a temporary absence.
Statutory residency catches people who are domiciled elsewhere but keep a place to live in the state and spend more than a set number of days there. It rarely matters abroad, but can bite in the year you leave or return.
Your old domicile is presumed to continue, so if a state questions your nonresident return, the burden is generally on you to prove you left, with documents rather than assertions.
Sticky states: which are hardest to leave?
The ones expat practitioners flag most often are California, New York, Virginia, South Carolina and New Mexico, with Maryland and the District of Columbia close behind. None is impossible to leave. What doesn’t work is a casual departure where you keep everything in place “just in case”.
| State | Resident if… | Exit-year return |
|---|---|---|
| California | In CA for other than a temporary or transitory purpose, or domiciled in CA and away only for a temporary or transitory purpose | Form 540NR |
| New York | Domiciled in NY, or a permanent place of abode for substantially all the year plus 184 or more days in NY | Form IT-203 (+ IT-360.1 for NYC or Yonkers) |
| Virginia | Domiciled in VA, or living in or keeping a place of abode in VA for more than 183 days | Form 760PY |
| Maryland | Domiciled in MD, or a place of abode for more than six months plus 183 or more days present | Form 502 (part-year) |
| District of Columbia | Domiciled in DC during the year, or a place of abode in DC for 183 or more days | Form D-40 (part-year) |
How do I break California residency when I move abroad?
The Franchise Tax Board (FTB) treats you as a resident if you’re in California for other than a temporary or transitory purpose, or if you’re domiciled there and away only for a temporary or transitory purpose. Spend more than nine months of a year in the state and you’re presumed resident.
California doesn’t allow the FEIE or a foreign tax credit
FTB Publication 1031 says so directly. If you claimed the foreign earned income exclusion federally, you add it back on Schedule CA (540NR). So if California still treats you as a resident, your overseas salary is taxable there with no credit for the tax you paid abroad.
California’s 546-day safe harbor for employment contracts
There’s one clean way out. A California domiciliary who’s outside the state under an employment-related contract for an uninterrupted 546 consecutive days or more is treated as a nonresident. Return visits totalling 45 days or less in any tax year of the contract count as temporary, and an accompanying spouse or registered domestic partner is covered too. It fails if you have more than $200,000 of intangible income (interest, dividends, gains) in any tax year of the contract, or if the main purpose of the absence is avoiding California tax.
It’s for work contracts, so retirees and people who simply decide to move don’t get it, and you can’t stitch contracts together: FTB’s own example of two back-to-back one-year contracts fails. Outside the safe harbor it comes down to facts. A kept licence and voter registration, a home still available to you, family still there and a fixed return date say you’re still a Californian; a house sold or let long-term, a family that moved with you and an open-ended lease abroad say you left.
Example: Emma, San Francisco to London
Say Emma, a product manager, takes a job in London in April 2025 on a local UK contract with no end date. She earned $45,000 in California from January to March and earns $180,000 in London for the rest of the year, paying UK tax on it.
If she keeps her San Francisco condo empty “for visits” and her California licence and voter registration too, she’s exposed: if FTB decides she never left, it can tax her London salary with no FEIE and no credit for UK tax.
If she lets the condo long-term to an unrelated tenant, surrenders her licence, cancels her registration and moves her banking and mail to London, her case is much stronger. Her part-year Form 540NR taxes the $45,000 as resident income and, after April, only California-source income like the condo rent. Her federal return reports all $225,000 with the FEIE or foreign tax credit on the UK pay. California sets the rate by reference to total income, though, so the tax isn’t what $45,000 alone would cost.
How does New York decide residency, and what’s the 548-day rule?
New York treats you as a resident if it’s your domicile, or if you keep a permanent place of abode there for substantially all of the year and spend 184 days or more in the state. New York City and Yonkers use the same tests. Living abroad, you won’t hit 184 days, so the fight is over domicile. New York weighs your home, active business ties, time, family and where you keep the things you care about.
The 548-day rule offers a way to be treated as a nonresident without changing domicile. Broadly, you need to be in a foreign country for at least 450 days in a 548-day consecutive period; you, your spouse (unless legally separated) and your minor children can spend no more than 90 days in New York during it; and you can’t keep a New York home where your spouse or minor children are present for more than 90 days. The day limit is prorated for the partial years at each end. It doesn’t end your domicile, New York-source income stays taxable, and we plan around it before the move, not after.
Keep a day log from the day you leave
In New York any part of a day in the state counts, so a late landing at JFK and a flight out next morning are two days. Keep flight records or a travel-app log for every US day: the 548-day rule and California’s safe harbor both live or die on the count.
Example: Marcus, Brooklyn to Singapore
Take Marcus, who moves to Singapore in August 2025 on a two-year assignment. His wife and daughter follow in October. They let their Brooklyn apartment to a tenant and plan to come back.
With an end date and a plan to return, his domicile likely never changed. But if he’s abroad at least 450 days in a 548-day window and the family keeps within the 90-day limit, the rule treats him as a nonresident for that period anyway. He files Form IT-203 for 2025, with Form IT-360.1 for the change in New York City status.
Virginia, Maryland and DC residency: what’s different?
Virginia has two kinds of resident. An actual resident is physically there, or keeps a place of abode there, for more than 183 days of the year. A domiciliary resident is anyone whose legal home is Virginia, wherever they live. Virginia Tax is blunt about expats: a resident who takes a job in another country stays a domiciliary resident “unless appropriate steps are taken to abandon Virginia as the state of domicile.” Part-year residents file Form 760PY.
Example: Priya, Arlington to Dubai
Say Priya leaves Arlington for a job in Dubai in April 2025. The UAE doesn’t tax her salary, so there’s no foreign tax to offset anything a state claims.
If Virginia still considers her domiciled there, it can tax her as a resident, at least on what the federal exclusion doesn’t shelter: her brokerage income and any salary above the 2025 FEIE limit of $130,000. So she surrenders her Virginia licence and car registration, cancels her voter registration, ends her Arlington lease, signs a long lease in Dubai and files Form 760PY for 2025 showing the move date.
Maryland makes you a resident if you’re domiciled there, or if you keep a place of abode there for more than six months of the year and are present 183 days or more. Any part of a day counts, though a continuous stretch of 24 hours or less can’t count as more than one day. Part-year residents file Form 502 with their move dates, and the county income tax follows your residency. Sell the Bethesda house before a permanent move to Berlin and the statutory test has nothing to attach to.
DC treats you as a resident if you were domiciled there during the year, or kept a place of abode there for 183 days or more in total. That test turns on maintaining the abode, not on how often you were in it, so hanging on to your DC apartment after you leave can matter even if you’re rarely there. Part-year residents file Form D-40.
Military families are different: the Servicemembers Civil Relief Act and the Military Spouses Residency Relief Act can keep a state of legal residence wherever you’re stationed, so get advice on your own situation.
How do I break state residency before moving abroad?
No single step decides it, and no state publishes a checklist that guarantees the result. What persuades an auditor is a pattern: your life moved, and you didn’t leave the machinery for coming back in place. Here’s the order we work through with clients before they fly.
- 1
Deal with the home
Sell it, or let it long-term to an unrelated tenant with no room kept for you. An empty house kept ready is one of the clearest signs you mean to return.
- 2
Surrender your driver’s licence and cancel your voter registration
Get a local licence and sell or re-register the car. You can still vote absentee in federal elections as an overseas voter.
- 3
Move your family, belongings and routine
Where your spouse and children live and go to school weighs heavily. So do heirlooms and pets.
- 4
Change every address
Banks, brokerages, cards, insurers, payroll and your federal return.
- 5
Set up a real home abroad
A local lease, local registration where required, a bank, a doctor. An open-ended local contract says more than a fixed-term assignment.
- 6
Wind down the ties you don’t need
Professional licences you won’t use, club memberships, safe deposit boxes, and any business you actively run in the state.
- 7
Keep a domicile file
Copies of the surrendered licence, the voter cancellation, the sale or lease papers, your overseas lease and employment contract, first utility bills abroad, and your day log. Keep it as long as the state could audit the year.
One shortcut we talk people out of: switching domicile to Florida or Texas on the way out with a mailbox and a new licence while life stays in California or New York until the flight. Domicile follows where you actually live and mean to stay, so an address you never lived at is weak evidence and can itself look like tax avoidance.
What draws an audit is predictable: a nonresident return with an in-state address, family still in the home state, an empty house kept for you, long visits back with no day log, and coming back soon after “moving”.
What do I file in the year I leave? (part-year state returns)
In the exit year you usually file your federal Form 1040, with Form 2555 for the FEIE or Form 1116 for foreign tax credits, and a part-year resident return for your old state. The state taxes what you received while resident. After the move date it taxes only income sourced there: rent on a house you kept, a business in the state, some deferred pay. Equity compensation that vests after you leave can still be partly taxable by the old state, since California and New York generally allocate it by where you worked during the vesting period. In later years, any state-source income goes on a nonresident return.
At filing time, here’s what we check:
- A part-year return for your former state for the exit year
- Nonresident returns for any state-source income in later years
- Your foreign address on both the federal and state returns
- That your state allows the FEIE before relying on it
Which states don’t allow the foreign earned income exclusion?
Most states start from federal adjusted gross income, so the FEIE flows through. A few don’t, and for their residents the exclusion is added back or never allowed:
| State | Treatment of the FEIE |
|---|---|
| California | Not allowed; no foreign tax credit either (FTB Pub 1031) |
| Massachusetts | Amounts excluded under IRC §911 are added back to Massachusetts income |
| New Jersey | Foreign earned income and housing exclusions not allowed |
| Pennsylvania | Taxes resident compensation from all sources; the federal exclusion does not apply |
Other states have been reported as non-conforming, and conformity changes, so check your state’s current instructions. In these four, staying a resident means the federal exclusion does nothing for you.
No-income-tax states: do Florida, Texas and Nevada residents file anything?
Usually not. If your last US home was in Alaska, Florida, Nevada, South Dakota, Tennessee, Texas or Wyoming, there’s no personal income tax and no state return on your wages while you’re abroad. Tennessee’s Hall tax on investment income is gone, and New Hampshire repealed its interest and dividends tax for periods beginning on or after 1 January 2025. Washington doesn’t tax wages but does levy a capital gains excise tax on certain long-term gains, and it has enacted a tax on income over $1 million from 2028 that’s being challenged in court.
Moving from Austin to Mexico to work remotely, you have no Texas residency to break, and the effort goes into the federal return. The state question only comes back if you later move to an income-tax state, or lived in a sticky state before Texas and never cleanly left it.
Moving back to the US: how does state tax work when you return?
You generally become a resident of your new state from the day you move there intending to stay, and file a part-year return. Foreign income earned before the move usually isn’t taxed by the new state, though the timing of bonuses, sales and vesting can change that. Landing in Texas is very different from landing in California. And go back to the same state soon after leaving and expect it to argue you never really left.
Getting your state and federal returns right
Our returns are prepared and signed by Enrolled Agents. The Essential tier at $145 includes one state return. Expat at $275 adds the FEIE, foreign tax credits, FBAR and the multi-state allocation for the year you move, and Premier at $475 covers equity compensation and other complex cases. Each additional state return is $75. See expat pricing or how filing works.
For the federal side, read the US expat tax guide and the FBAR guide, and if you’re behind, the Streamlined procedures guide. Country pages cover the federal side for the UK, Singapore and the UAE. Still planning the move? That’s the best time to get the state piece right: talk to us about tax planning or book a call.