How to leave Idaho residency?

Moving out of Idaho can be an exciting change, whether it's for a new job, lower taxes, or just a change of scenery. Idaho has specific rules about residency that can impact your tax responsibilities, eligibility for state benefits, and more.

Step 1: Establish a new domicile

Once you’ve decided to leave Idaho, the next step is to set up your new permanent home—your domicile—in another state. Simply moving isn’t enough; you must take concrete steps to make your new state your official residence. 

Here’s how to do that:

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 Idaho.

• File a Declaration of Domicile: Some states, like Florida, allow you to file a Declaration of Domicile, a legal document that confirms your intent to make the new state your permanent home.

Residency guides:

• Florida Residency Guide
• South Dakota Residency Guide
• Texas Residency Guide
• Nevada Residency Guide

2) Relocate your belongings

Moving your personal belongings—like furniture, vehicles, and household items—helps show that your move is permanent, and that you intend to live in the new state long-term.

3) Spend time in your new state

Spending a significant amount of time in your new state indicates a genuine relocation. Ensure that you spend more time there than in Idaho to avoid any confusion about your primary residence.

4) Transfer IDs and vehicle registrations

Update your driver’s license and vehicle registration to reflect your new address in your new state. This is a strong indicator of your intent to live there permanently.

5) Register to vote

Registering to vote in your new state is a clear indicator of residency. Don’t forget to cancel your voter registration in Idaho as well.

6) Update financial accounts

Notify your bank, credit card companies, and other financial institutions of your new address. Keeping all your financial documents up to date with your new residency helps confirm your move.

7) Notify your employer

Let your employer know about your new address so they can update your payroll and tax withholdings to your new state. This will help make sure Idaho doesn’t withhold state income taxes after your move.

Step 2: Sever ties with Idaho

After establishing your new home, it's important to sever significant ties with Idaho to ensure you are no longer considered a resident for tax purposes.

Here are the steps you should take to sever these ties:

1) Close Idaho financial ties

• Close local bank accounts: If you have any bank accounts, investment accounts, or financial assets linked to Idaho, consider closing them or transferring your funds to banks in your new state. This action shows that your financial life is now centered in your new state.
• Update personal records: Notify the IRS, Social Security, insurance companies, and other relevant agencies of your new address to ensure all personal records reflect your new residence.

2) Sell or lease property

If you own a home or any other property in Idaho, selling it is one of the strongest ways to show that you no longer consider Idaho your primary residence. If you’re not ready to sell, consider leasing the property out for an extended period, which can also help demonstrate your intent to leave.

3) Cancel local subscriptions/services

Cancel any subscriptions or memberships tied to Idaho, such as gym memberships, utilities, or local services. Keeping these active could suggest that you still have ties to the state.

4) Transfer healthcare and insurance

Transferring your healthcare providers and insurance to your new state shows that your essential services are now tied to your new domicile.

Step 3: Time spent outside Idaho

To avoid being taxed as a resident in Idaho, managing how much time you spend in the state is important. Idaho employs the 183-day rule, commonly used by many states to determine residency.

183-day rule

• What is the 183-day rule?: If you spend 183 days or more in Idaho 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 the 183-day limit: To avoid being taxed as a resident, you’ll want to make sure you spend fewer than 183 days in Idaho each year. A day counts as any part of a 24-hour period spent in the state, so even short visits can add to your total.

Absence from Idaho

An individual may be treated as a non-resident if they are absent from Idaho for at least 445 days within a 15-month period, provided certain conditions regarding their permanent home and family ties are met.

It is important to ensure that your home is not available for use in Idaho during this period to avoid being considered a resident for tax purposes.

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 Idaho will prove that you’ve stayed under the 183-day limit.
• What to track: Save flight tickets, hotel receipts, and other travel documents showing when you entered and left Idaho. Having a detailed log of your movements will be helpful if Idaho’s Department of Revenue ever audits your residency status.

Step 4: Idaho-sourced income

Even after officially leaving Idaho residency, you may still have some income tied to the state, such as rental or business revenue. It’s important to know how to handle Idaho-sourced income to comply with state tax laws.

Here’s how to handle Idaho-sourced income once you’ve moved:

1) Ongoing tax responsibilities

• File non-resident tax returns: If you continue to earn income from sources within Idaho, such as rental properties or businesses, you’ll need to file non-resident tax returns. This ensures that Idaho only taxes the income you earned within the state, not the income from your new home state.
• Tax on Idaho-sourced income: Even though you are no longer a resident, Idaho still has the right to tax income generated within the state. This could include wages earned in Idaho, rental income, or profits from Idaho-based businesses.

2) Rental or business income

If you own rental property or a business in Idaho, any income generated from those sources will still be subject to Idaho state taxes. It’s important to consult with a tax professional to ensure compliance with Idaho tax laws, especially if you have complex income streams that tie back to the state.