How to leave Mississippi residency?

Leaving Mississippi residency can be an exciting change, whether you’re moving for a new job, lower taxes, or just a change of scenery. Mississippi has specific rules about residency that can affect your tax obligations, eligibility for state benefits, and more.

This guide will explain the steps to officially leave Mississippi, establish your new domicile, and manage any remaining financial ties with the state.

Step 1: Establish a new domicile

After deciding to leave Mississippi, the next step is to establish your new permanent home, or domicile, in another state. Simply moving isn't sufficient; you must take specific actions to establish your new state as 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 through renting or buying a home. Many states, such as 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 Mississippi.

• 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, such as furniture, vehicles, and household items, demonstrates that your move is permanent and signifies your intention to reside in the new state long-term.

3) Spend time in your new state

Spending a significant amount of time in your new state demonstrates that you have truly relocated. Ensure that you are spending more time there than in Mississippi 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 Mississippi 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 reflect your new state. This will help ensure that Mississippi doesn’t withhold state income taxes after your move.

Step 2: Sever ties with Mississippi

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

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

1) Close Mississippi financial ties

• Close local bank accounts: If you have any bank accounts, investment accounts, or financial assets linked to Mississippi, you should consider closing them or transferring your funds to banks in your new state. This action will demonstrate that your financial affairs are 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 Mississippi, selling it is one of the strongest ways to show that you no longer consider Mississippi 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

Make sure to cancel any subscriptions or memberships linked to Mississippi, such as gym memberships, utilities, or local services. Keeping these active could indicate that you still have connections 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 Mississippi

To avoid being taxed as a resident in Mississippi, it is important to carefully manage the amount of time spent in the state. Mississippi follows 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 Mississippi 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 Mississippi 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.

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 Mississippi will be essential for proving that you’ve stayed under the 183-day limit.
• What to track: Save flight tickets, hotel receipts, and any other travel documents that show when you entered and left Mississippi. Having a detailed log of your movements will be helpful if your residency status is ever audited by Mississippi’s Department of Revenue.

Step 4: Mississippi-sourced income

Even after you have officially left Mississippi residency, you may still have some income tied to the state, such as rental income or business revenue. It is important to understand how to handle Mississippi-sourced income in order to remain compliant with state tax laws.

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

1) Ongoing tax responsibilities

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

2) Rental or business income

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