How to leave Georgia (GA) residency?
Leaving Georgia residency can bring some financial benefits, especially if you’re moving to a state with lower taxes or better job opportunities. Georgia has an income tax system that applies to your worldwide income if you’re a resident, and for many people, moving to a state like Florida or Texas, which doesn’t have state income taxes, can save a lot of money.
But moving isn’t just about finding a new place to live—you also need to make sure you officially sever your ties with Georgia so that you aren’t taxed as a resident anymore. This guide will walk you through the important steps you need to take to establish a new domicile, cut your connections to Georgia, and manage any Georgia-based income that could still be taxable.
Whether you’re leaving for a new job, retirement, or just a change in lifestyle, following these steps will help you avoid extra taxes and make your move as smooth as possible.
Step 1: Establish a new domicile
The first step in leaving Georgia residency is establishing a new permanent home, or domicile, in another state. This means more than just physically moving—you need to take steps that show you intend to live in the new state long-term. Here’s how you can get started:
1) Establish new residency
- Secure a residential address: Find a place to live in your new state, whether it’s through renting or buying a home. Many states, like Florida, offer tax benefits such as the homestead exemption, which could help lower your property taxes. Setting up a permanent residence in your new state is essential to proving that you’ve left Georgia.
- File a Declaration of Domicile: Some states, like Florida, allow you to file an official document called a Declaration of Domicile to prove that you intend to make this new state your permanent home. This is especially helpful if you’re moving from a state with significant tax obligations, like Georgia.
Residency guides:
2) Relocate your belongings
Move your personal belongings to your new home in the state. This helps show that your move is permanent, as you are transferring your life to a new location.
3) Spend time in your new state
Spending significant time in your new state is another way to prove your residency. Try to minimize the amount of time you spend in Georgia during this transition to avoid being taxed as a resident there.
4) Transfer IDs and vehicle registrations
Transfer your driver’s license and vehicle registration to your new state as soon as possible. This shows that your life is now centered in your new state, not in Georgia.
5) Register to vote
Registering to vote is a key indicator of residency. Make sure to cancel your voter registration in Georgia and register in your new state. This step helps solidify your claim to your new domicile.
6) Update financial accounts
Make sure your bank accounts, credit card statements, and other financial documents reflect your new address. Keeping these records up to date will show that your finances are now based in your new state, not in Georgia.
7) Notify your employer
Notify your employer of your new address and ensure that your payroll and tax withholdings reflect your new state. This will help you avoid being taxed by Georgia after your move.
Step 2: Sever ties with Georgia
Once you’ve established a new domicile, it’s time to officially cut your ties with Georgia to ensure that the state no longer considers you a resident for tax purposes. Here’s how you can sever your connections with the state:
1) Close Georgia financial ties
- Close local bank accounts: If you have Georgia-based bank accounts, consider closing them and transferring your funds to banks in your new state. This demonstrates that your financial life is now rooted in your new home.
- Cancel Georgia voter registration: Make sure you cancel your voter registration in Georgia and register to vote in your new state. Voting records are often used to determine residency.
- Update personal records: Update your address with the IRS, Social Security, and any other relevant entities. Keeping all personal and financial records in your new state helps solidify your move.
2) Sell or lease property
If you own property in Georgia, selling it is one of the clearest ways to show that you no longer reside in the state. Alternatively, leasing the property on a long-term basis can also demonstrate that you don’t maintain significant ties to Georgia.
3) Cancel local subscriptions/services
Make sure to cancel memberships, subscriptions, and services tied to Georgia, such as gym memberships, utility services, and local clubs. Maintaining these services could suggest that you’re still tied to the state, so it’s best to transfer or cancel them.
4) Transfer healthcare and insurance
Update your healthcare providers to those in your new state, and make sure your health insurance reflects your new address. This demonstrates that your day-to-day life is now rooted in your new state, further supporting your non-residency in Georgia.
Step 3: Time spent outside Georgia
After establishing your new domicile and severing ties with Georgia, it’s crucial to track the amount of time you spend in the state. Like many states, Georgia uses the 183-day rule to determine residency for tax purposes, so it’s important to stay below this threshold to avoid being classified as a Georgia resident for taxes.
183-day rule
What is the 183-day rule?: If you spend 183 days or more in Georgia in a calendar year, you may be considered a resident for tax purposes, even if you’ve moved to another state. This means you could be liable for state income taxes.
Stay under 183 days: To avoid being classified as a resident, ensure you spend fewer than 183 days in Georgia each year. This rule applies regardless of where your primary residence is.
How it works: A day counts as a full day in Georgia if you’re present in the state for any part of it. So, even if you only spend a few hours in Georgia before traveling to another state, that day still counts.
Keep detailed travel records
Why it’s important: If your residency status is ever questioned, having detailed records of your time spent in and out of Georgia will be essential for proving that you’ve stayed under the 183-day limit.
What to document: Keep copies of flight tickets, hotel receipts, and any other documents that show when you entered and left Georgia. This will help protect you in case the Georgia Department of Revenue audits your residency status.
By keeping careful records and ensuring that you stay under the 183-day limit, you can avoid being classified as a Georgia resident and minimize your tax obligations in the state.
Step 4: Georgia-sourced income
Even after successfully leaving Georgia residency, you may still have tax obligations if you continue to earn income from sources within the state. Here’s how to handle Georgia-sourced income:
1) Ongoing tax responsibilities
If you continue to earn income from Georgia, such as rental income, business profits, or wages, you’ll need to file a non-resident Georgia tax return. This ensures you only pay taxes on the income sourced from Georgia, while your income from other states remains separate.
2) Rental or business income
If you own rental property or a business in Georgia, any income generated from those sources will still be subject to Georgia state taxes. It’s important to consult with a tax professional to ensure compliance with Georgia tax laws, especially if you have complex income streams that tie back to the state.