Pennsylvania Determining Residency for PA Personal Income Tax Purposes Brochure

Determining Residency for PA Personal Income Tax Purposes Brochure
Brochure: Determining Residency for PA Personal Income Tax Purposes (REV-611)
CONTACT INFORMATION
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DETERMINING RESIDENCY
FOR PA PERSONAL
INCOME TAX PURPOSES

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AM I A RESIDENT OF PA FOR PERSONAL INCOME TAX
PURPOSES?
Individuals who are domiciled in PA or who are statutory
residents of PA are subject to PA personal income tax on
income, regardless of where the income was earned. Both
residents and statutory residents may qualify for credits
against tax paid to other states on income earned outside
of PA.
Individuals who are neither domiciled in PA nor have statutory
residency in PA are taxed only on income from sources within
PA and cannot qualify for PA credits against taxes paid to
other states.
WHERE AM I DOMICILED?
A domicile is the place at which an individual maintains his/
her permanent abode and to which he/she intends to return
whenever absent. A person may only have one domicile at
any one time.
What is a permanent abode?
An abode is a house, apartment, or other building maintained
as a dwelling place. An abode is permanent if it is maintained
as a dwelling place for an indefinite period of time, whether
the occupants own it or not. An abode that is occupied only
during a fixed or limited period of time for a particular purpose
is not a permanent abode.
Barracks, bachelor officer's quarters, quarters on ships and
other living accommodations provided by an employer for a
definite period do not qualify as permanent abodes. Further,
college dormitories, fraternity houses, sorority houses
and off-campus rentals by students enrolled in college or
universities do not qualify as permanent abodes.

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nearest you, listed in the government pages
of your local phone directory.

What if I maintain more than one permanent abode?
The domicile of an individual who maintains more than one
permanent abode is determined by two factors: (1) Which is
the one place where the individual has had the greatest
connections for the taxable year; and (2) Which place does
the individual intend to be his/her domicile?
For example, a locality with the greatest connections is where
a person:
• spends the greatest amount of time
• supports a spouse and children
• purchases the necessities of life
• has doctors, lawyers and accountants
• houses pets
• has active banking accounts
• worships regularly
• participates in social, fraternal or athletic organizations
• has works of art, furniture, family portraits or heirlooms

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REV-611 PO (06-15)

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fulfills local tax obligations
is employed
owns real estate fit for year-round living
maintains a driver's license and vehicle registration
maintains professional licenses
maintains union membership
declares residency for hunting or fishing licenses, income
tax returns or school tuition
conducts business
receives mail
receives unemployment compensation
records his or her address for insurance policies, deeds,
mortgages, leases, passport, federal and local tax
returns, etc.
was domiciled at birth
maintains safe deposit boxes
owns a cemetery plot
claims a homestead exemption
is listed in the telephone directory
obtains homestead exemption
gathers for family and social events
maintains TV and Internet connections
registers to vote

What is a statutory residence?
A statutory residence is the place where an individual spends
the most time during the year. More specialized definitions,
however, apply when the person does not maintain a
permanent place of residence in PA or has frequent or
prolonged absences from his/her place of residence. A person
is considered a statutory resident of PA unless:
• the person spends more than 181 days (midnight to
midnight) of the tax year outside PA; or
• the person has no permanent abode in PA for any part of
the tax year.
How do I establish a new domicile?
A person can have only one domicile at a time, and it does
not change until they move to another state or country
with the intention of making a new permanent home there,
abandoning the previous domicile.
If a person moves to another state or country, but intends to
stay there only for a fixed or limited time (no matter how
long), domicile does not change. Domicile is not dependent
upon continuous physical presence. It is not abandoned
by absence there or by presence in a former domicile, so
long as there is not firm, sincere, unconditional intention
of remaining in the other jurisdiction for an indefinite and
uncertain period.

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For example, PA domicile does not change when a person is
temporarily absent – to return to a former domicile for
business, health, pleasure or education – with intention to
return to the PA domicile.
To establish a new domicile, a taxpayer must:
1. Show evidence of definite intention to discontinue making
the former domicile the primary base of operations;
2. Show evidence of definite intention to make the new
domicile the primary base of operations; and
3. Show evidence of physical presence and abode (transient,
temporary or permanent) in the new location.
If all three requirements are met, the date of the change is
the first day of physical presence in the new location. If a
person left the domicile to seek new employment, intending
to remain in the other location only if they find employment,
there is no change in domicile.
I am retired with a permanent summer home outside
PA and a permanent winter home in PA. How do I
determine domicile?
A person may have only one state of domicile at any given
time, and state of domicile does not change until someone
moves to another state or country with the intention of
making a new permanent home there, abandoning the
previous domicile.
To determine which location is your domicile, review the
bulleted list of activities previously identified in this brochure
to determine the location with the greatest connection. Then
determine if you have taken the necessary steps to establish a
new domicile outside PA, considering the three requirements
identified in the previous question.
How does being in the military or foreign service
affect my domicile and my family's domicile?
Unless there is an intention to change domicile, a person
generally does not acquire a new domicile or lose the domicile
maintained before entering the armed forces. However, a
person in the armed services or foreign service, as well as
his/her spouse and family, may establish a new domicile
wherever he/she or his/her family is stationed. In order to
change domicile, the service member and/or family must
intend to establish a new domicile as discussed in the How
do I establish a new domicile? section. Someone living
in a foreign country for something other than a temporary or
transitory purpose is treated as a domiciliary of that country
if the person:
• Is not an employee of the U.S., its agencies or instrumentalities (including the armed forces and U.S. foreign
service); and
• Does not hold an appointive office in the executive branch
of the U.S. government.

An individual who is domiciled in PA and who also maintains
a permanent abode in a foreign country is considered a
nonresident of PA for income tax purposes if the person
meets all three of the following requirements:
1. The individual is absent from PA for more than 335
complete calendar days of the tax year;
2. The individual maintains a permanent place of abode
elsewhere during the entire tax year; and
3. The individual maintains no permanent place of abode in
PA at any time during the tax year.
The Military Spouses Residency Relief Act (MSRRA), which was
signed into federal law on Nov. 11, 2009, permits a service
member’s nonmilitary spouse to retain status as an out-ofstate resident and source any nonmilitary compensation to
the state of residence under the following circumstances:
1. The service member must be in PA in compliance with
military orders;
2. The service member’s spouse must be in PA solely to be
with his/her spouse; and
3. The service member’s spouse must have the same
domicile (legal residence) as the service member.
For detailed information on how MSRRA impacts state taxation
of income earned by a service member’s nonmilitary spouse,
review the comprehensive personal income tax Tax Bulletin
2010-01 on the department’s website, www.revenue.pa.gov.
For more information of taxation of military pay, review
brochure REV-612, Military Pay for PA Personal Income Tax
Purposes.
How do dependents determine domicile?
Generally, children have the same domiciles as their parents
or legal custodians. If the parents are separated, the child’s
domicile is the domicile in which the child lives or that of
child’s legal custodian. Becoming an adult does not by itself
separate a child from a parent’s or legal custodian's domicile.
The child merely acquires the power to establish a separate
or new domicile.
College dormitories, fraternity houses, sorority houses
and off-campus rentals by students enrolled in college or
universities do not qualify as permanent abodes.
How does PA tax nonresidents?
PA taxes nonresidents on the following income from PA
sources:
• Compensation for services performed in PA, unless the
nonresident is a resident of Indiana, Maryland, New Jersey,
Ohio, Virginia or West Virginia. If you are a resident of
one of these states, your PA employer should withhold
and remit tax to that state.

• Net income (loss) from the operation of a business,
profession or farm in PA. If you derive income from
sources inside and outside PA, you should maintain
separate accounts and records that clearly reflect your PA
business activity. Otherwise, you must file a PA Schedule
NRH to apportion your income.
• Net income (loss) from the sale, exchange or
disposition of property in PA. If you sell property in your
former state before moving into PA, you are not subject
to PA income tax on the gain. However, if you moved from
PA to another state and then sell tangible property in PA,
you must report the gain. You may qualify for an exclusion
from paying tax on the gain on the sale of your principal
residence in PA.
• Net income (loss) from rents, royalties, patents and
copyrights in PA or used in PA.
• Estate or trust income, only to the extent the beneficiary’s PA-source income is taxable to nonresidents.
• Gambling and lottery winnings from PA sources
except prizes from the PA Lottery.
PA does not tax nonresidents on ordinary interest and dividend
income, even from financial institutions and corporations
located in PA. PA does not tax nonresidents on the gain
(or loss) realized from the sale, exchange or disposition of
intangible property.
When is a person considered a part-year resident?
A person who moves into or out of PA with the intention of
acquiring a new domicile is considered a part-year resident for
the part of the tax year the individual maintains a permanent
place of abode in PA.
There are two exceptions to this general rule:
1. An individual is considered a nonresident rather than a
part-year resident if that person spent less than 31 days
of the year in PA, maintained a permanent place of abode
outside PA during the entire tax year and maintained no
permanent place of abode in PA at any time during the
tax year.
2. An individual is considered a resident rather than a partyear resident if that person was physically present in PA for
at least 184 days (or parts of 184 days) and maintained
a permanent place of abode in PA at any time during the
tax year.
What kinds of income should part-year residents
report on PA personal income tax returns?
Part-year residents are subject to PA tax on all income
earned, received or credited for the part of the year they were
a residents of PA, as well as on all income earned, received
or credited from PA sources for the part of the year they were
nonresidents.

Part-year residents of PA must file PA personal income tax
returns, filling in the oval for a part-year return and recording
the time they were residents. Part-year residents are not
subject to PA tax on ordinary interest, dividends and gains on
intangible property while nonresidents.
What are reciprocal tax agreements?
PA has reciprocal tax agreements with Indiana, Maryland,
New Jersey, Ohio, Virginia and West Virginia. Under these
agreements, one state will not tax a resident of the other
state on compensation subject to employer withholding.
These agreements apply to most W-2 compensation earned
while a taxpayer is a resident of one of these states. Such
agreements do not apply to miscellaneous and non-employee
compensation; compensation earned while a PA resident and
received while a resident of the reciprocal compensation
agreement state; or compensation paid to Ohio-resident
shareholder-employees who worked or performed services
in PA and have 20 percent or greater interest in a PA S
corporation.
What if I am a PA resident working in a reciprocal
agreement state?
For PA residents who work in reciprocal agreement states,
PA taxes compensation, not the reciprocal state. It is the
taxpayer’s responsibility to notify the employer of PA residency,
and the employer should withhold PA tax from pay, not
income tax of the reciprocal state.
If an out-of-state employer does not withhold PA tax, the
taxpayer must report compensation as taxable income to PA
and pay the tax. The taxpayer must make PA estimated
payments if compensation not subject to withholding by a PA
employer is more than $8,000. The taxpayer may also file a
return and apply for a refund from the other state.
What if I have dual residency?
PA residents who are also residents of reciprocal states for
income tax purposes are subject to special rules. A PA resident
credit may be claimed only if each of the following applies:
1. The income on which the reciprocal state’s tax is imposed is
not only subject to tax in the same taxable year by PA, but
also taxable under the reciprocal state’s laws regardless
of residence or domicile; and
2. The taxpayer is not entitled to claim any credit for PA tax
against the reciprocal state’s tax.
To claim the PA resident credit, a taxpayer must file PA
Schedules G-S or G-L and G-R and include a copy of the tax
return filed with the other state. The copy of the other state’s
return shows the other state taxed the person as a resident,
and no credit was claimed for the PA tax paid to that state.

www.revenue.pa.gov