Statutory Residency in New York: What Qualifies as a Permanent Place of Abode?

Jennifer S. White, Esq., and Jason Feingertz, Esq., CPA
Published Date:
Apr 1, 2017

It is no surprise that many individuals choose to have a second home in a state as wonderful as New York. While having access to a New York dwelling certainly has its perks, it might also come with the pitfall of subjecting an individual to New York State personal income tax (“Tax”) on worldwide income. Please note that while the following discussion focuses on state guidance, the discussion is also applicable to statutory residency issues for New York City personal income tax.

Under New York tax law, an individual that establishes a domicile outside of New York will nonetheless be deemed a “statutory resident” of New York—and thus subject to Tax as a resident—if he or she (1) maintains a permanent place of abode in New York for substantially all of the taxable year (generally, at least 11 months) and (2) spends more than 183 days in New York during the taxable year. This article discusses the meaning of a “permanent place of abode” and common scenarios that might complicate the determination as to whether a dwelling is deemed a permanent place of abode for Tax purposes.

I. What is a Permanent Place of Abode?

New York defines a permanent place of abode as “a dwelling place of a permanent nature maintained by the taxpayer, whether or not owned by such taxpayer.” Under Matter of Evans v. Tax App. Trib., 606 N.Y.S.2d 404 (1993), the “permanent” nature of the dwelling must encompass (1) the physical aspects of the dwelling and (2) the individual’s relationship to the dwelling.

First, for a dwelling to be permanent, it must be suitable for year-round use and be more than “a mere camp or cottage.” This analysis focuses on the construction and other physical attributes of the dwelling, but it does not consider whether the individual actually used the dwelling year-round. It simply requires an objective analysis as to whether certain physical attributes exist that would allow an individual to use the dwelling year-round. A dwelling is generally required to contain cooking and bathing facilities to meet this threshold analysis.

Second, under Matter of Gaied v. Tax App. Trib., 22 N.Y.3d 592 (2014), "[T]here must be some basis to conclude that the dwelling was utilized as the [individual’s] residence.” To establish a residential interest, the individual must have free and continuous access to the dwelling. Other factors to consider include the frequency of use by the individual, the use of the dwelling by others, the individual’s relationship to the co-habitants of the dwelling, and whether the individual has his or her own room or keeps personal items at the dwelling.

II. Factual Scenarios to Consider

Individuals and practitioners should consider the following scenarios when evaluating whether the use of a second home qualifies as a permanent place of abode.

A. Vacation Homes

Individuals, all too often, assume that limiting the use of a vacation home to the summer months will prevent the dwelling from qualifying as a permanent place of abode. This, however, is not the case. In Matter of Barker, DTA No. 822324, (Tax App. Trib. 2011), the Tax Appeals Tribunal held that the taxpayers’ beach house was suitable for year-round use and thus was treated as a permanent place of abode, even though the taxpayers only used it a few days a year.

Consistent with such, “shutting down” a summer home—including putting outdoor furniture inside, disconnecting cable television, and turning off hot water—might not change the fact that the dwelling is suitable for year-round use. Absent a situation that physically prevents year-round use of the home as opposed to a voluntary decision to shut down the dwelling, the maintenance of a vacation home might result in the establishment of a permanent place of abode.

B. Renovations

Renovations, whether undertaken by choice or necessity, might result in a dwelling lacking the physical attributes needed to render it “permanent.” When considering the impact of renovations, it is necessary to distinguish between those that render a residence uninhabitable, and those that merely establish an inconvenience.

In Matter of Stewart, DTA No. 816263 (ALJ 2000), the administrative law judge determined that Martha Stewart’s East Hampton dwelling was habitable despite the existence of lingering renovations that began in 1990. Although the renovations continued through 1992, the administrative law judge determined that the dwelling became habitable by mid-1991, halfway through the renovations. By that time, a certificate of occupancy for the property had been issued, and the home had extensive cable television service. The administrative law judge also questioned the credibility of testimony asserting that the home was uninhabitable in light of conflicting statements made on an audit questionnaire, as well as in magazines and books.

To the extent that renovations temporarily eliminate the physical attributes needed to render a dwelling habitable, contemporaneous records should be maintained to support such reality. In our experience, the Department of Taxation and Finance (the “Department”) places an emphasis on whether a certificate of occupancy permitting an individual to live in the dwelling has been issued. Other relevant and persuasive documentation might include photographs of the property, insurance claims (describing damage to the property), and a summary of renovation expenses.

C. Restricted Access

Whether an individual has free and continuous access to a permanent place of abode is a primary consideration in determining if the individual has a residential interest in the dwelling. The focus of this analysis is whether the individual has access to the abode as a matter of right, or if he or she must gain permission to access the dwelling.

 The Department has narrowly interpreted what it means to be precluded from accessing a dwelling. In Matter of Brush, DTA No. 817204 (ALJ 2001), the taxpayer’s children testified that he only used his New York City apartment “a handful of days” because his estranged, alcoholic wife lived there, and her alcoholism infringed on his unfettered access to the premises because of the hostile situation he faced in her presence. The administrative law judge concluded that “the restriction on use was ultimately the result of his choice,” and that “while staying might have been unpleasant on many occasions, he was not restricted or precluded from doing so.”

The Brush case illustrates the Department’s position that absent an actual inability to access the dwelling, restrictions based on practical concerns—as opposed to legal restrictions—might not be viewed as enough to prevent free and continuous access.

D. Corporate Apartments

Many large corporations maintain corporate apartments for use by their executives who travel to New York. Unfortunately, this arrangement might result in the maintenance of a permanent place of abode for an individual with access to the apartment.

The Department’s guidelines assert the following thresholds for determining when a corporate apartment will be considered a permanent place of abode to an individual: When the apartment is maintained primarily for a specific individual and his or her family’s use, it is considered a permanent place of abode to that individual. Conversely, the apartment will not be considered a permanent place of abode if multiple individuals use the apartment and (1) use of the apartment is determined on a first-come, first-serve basis or (2) other users might have priority over use of the apartment. Under Matter of Knight, DTA No. 819485 (Tax App. Trib. 2006), the following facts are also considered to determine if access to a corporate apartment rises to the level of a permanent place of abode:

  • whether the individual shares in the expenses
  • whether there is a dedicated room to which the individual has free and continuous access
  • whether the individual keeps clothing or personal effects in the dwelling
  • whether the apartment is used for daily attendance in connection with employment.

Individuals should consider all of these factors to determine whether their access to a corporate apartment can result in the establishment of a residential interest in the dwelling.

E. Residences Maintained for Others

An individual may choose to maintain a home for a family member without considering the possibility that the dwelling might be treated as a permanent place of abode of such individual.

In Matter of Gaied v. Tax App. Trib., 22 N.Y.3d 592 (2014), the taxpayer maintained an apartment exclusively for the use of his elderly parents. The taxpayer did not keep any personal items at the apartment, and in those instances where he did sleep there to take care of his parents’ medical needs, the taxpayer would sleep on the couch because he did not have a bed in the apartment. The Court of Appeals stated that for a taxpayer to qualify as maintaining a permanent place of abode, he must have a “residential interest” in the dwelling, and that “there must be some basis to conclude that the dwelling was utilized as the taxpayer’s residence.” The taxpayer’s relationship to the dwelling did not rise to this level.

Thus, the sheer ability to access and use a dwelling is not enough to establish a residential interest if the taxpayer does not actually do so. It, however, remains possible that a residential interest might be established by virtue of the ability to use a dwelling that is primarily utilized by a family member. Under the guidelines, determination of whether an individual’s use of a residence rises to the requisite level is based—in part—on the size of the dwelling, whether the individual’s personal items are kept there, and the extent of the individual’s use.

III. Lingering Questions

The issue of what qualifies as permanent place of abode has undeniably received an abundance of attention by the Department and the tax community alike; however, a determination as to whether the requisite physical attributes and residential interest are met is a fact-specific inquiry. Therefore, while the aforementioned guidance provides useful guideposts, the issue as applied to each individual is far from settled.

Consider the following unique factual scenarios:

  • An individual moors a yacht—complete with a kitchen, bathrooms and bedrooms—in New York. Weather conditions render the use of the yacht impractical, but not impossible, during the winter.
  • A husband and wife are engaged in a contentious divorce proceeding. During the proceeding, the husband lives in a separate dwelling, despite his legal right to use the marital house.
  • An individual is a member of a private members club with apartments and lofts available for use. The individual is not guaranteed the same room. Items may be left in storage at the club.

IV. Conclusion

In light of the complex, fact-specific inquiry involved in identifying a “permanent place of abode,” coupled with New York’s aggressive audit program, we encourage individuals and practitioners to routinely reevaluate a determination as to whether the requisite facts are met to establish such relationship.

Jennifer S. White, Esq., and Jason Feingertz, Esq., CPA, are attorneys in Reed Smith LLP’s New York office. They advise clients on all aspects of state and local tax and have extensive experience with New York State and City residency planning and audit defense. Ms. White can be reached at or 212-521-5406. Mr. Feingertz can be reached at or 212-521-5408.

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