Snowbirding in HI [Residency requirements for tax purposes]

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Escape Velocity
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Snowbirding in HI [Residency requirements for tax purposes]

Post by Escape Velocity » Wed Nov 07, 2018 9:07 pm

Hi folks,

I'm wondering if any BHers have experience snowbirding in Hawaii?

We're going to try it for the first time this year. We currently reside in NH. We own 2 properties in NH, 1 in HI, and a rental property in MA; we have lived for 35+ years in NH and that is our permanent residence. We have our drivers licenses from NH, and are registered to vote in NH.

Now here is my question (again, for folks that have specific experience with the State of Hawaii): What are the restrictions, if any, as to how long we are allowed to be physically present in HI and not trigger some residency/tax consequences?

We've done some research that seemed to indicate the presumed 6-month minus 1-day limit might not be the limit for Hawaii. From what I read (and cannot find the article at the moment), it appeared to be longer than that was allowable.

We have no specific plans, and for sure this year it will be less than 6 months in HI. But we certainly would prefer to have the flexibility to go over 6 months if it did not get us into any problems with the state. We intend and prefer to maintain NH as our official residence.

Thanks in advance for anyone that knows this area well, and can explain the rules. (And if you happen to be able to cite the appropriate documentation, so much the better).

EV-

(p.s., I'm guessing this is the preferred forum; if not, the moderator is encouraged to move it accordingly.)

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Thu Nov 08, 2018 9:51 am

I found this link that seems to/may address your question.

A resident is taxed on income from all sources.

A resident must file an Individual Income Tax ReturnùResident (Form N-11, N-12, or N-13), if required to do so.

A Hawaii Resident is:

Every individual domiciled in Hawaii, and

Every other individual whether domiciled in Hawaii or not, who resides in Hawaii for other than a temporary or transitory purpose.

An individual domiciled outside Hawaii is presumed to be a resident if he or she spends more than 200 days in Hawaii during the taxable year. This presumption may be overcome by evidence satisfactory to the Department of Taxation that the individual maintained a permanent place of abode outside the State and was in the State for a temporary or transitory purpose.

No person shall be deemed to have gained or lost a residence simply because of his or her presence or absence in compliance with military or naval orders of the United States, while engaged in aviation or navigation, or while a student at any institution of learning.

Part-Year Resident:

A part-year resident is an individual who was a Hawaii resident for part of the year, and who was a nonresident during the other part of the year. This includes those who moved to Hawaii during the year and those who moved away from Hawaii during the year.

A part-year resident must file an Individual Income Tax Return Nonresident and Part-Year Resident (Form N-15), if required to do so. A part-year resident will be taxed on all income from all sources during the period of residency, and on income from Hawaii sources only during the period of nonresidency.

Nonresident:

A Hawaii nonresident is an individual who is in Hawaii for a temporary or transient purpose, and whose permanent domicile is not Hawaii.

A nonresident must file an Individual Income Tax Return Nonresident and Part-Year Resident (Form N-15), if required to do so. A nonresident will be taxed on income from Hawaii sources only. A nonresident married to a Hawaii resident may choose to file a joint return with the resident spouse on Form N-11, N-12, or N-13; however, the nonresident will then be taxed on all income from all sources.

Election Under Act 60, SLH 1976
Individuals who took up residence in Hawaii after attaining the age of 65 years and before July 1, 1976, may elect to be taxed only on Hawaii source income. To make the election, attach a signed statement to Form N-12 setting forth the date that the individual established residence in Hawaii and the individuals date of birth (which must be before July 1, 1911). Individuals making this election must file a return regardless of the amount of income earned, and may not use Form N-11 or N-13.
http://supportsystem.livehelpnow.net/ar ... &aid=59596



Cheers

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Escape Velocity
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Re: Snowbirding in HI

Post by Escape Velocity » Thu Nov 08, 2018 12:07 pm

An individual domiciled outside Hawaii is presumed to be a resident if he or she spends more than 200 days in Hawaii during the taxable year. This presumption may be overcome by evidence satisfactory to the Department of Taxation that the individual maintained a permanent place of abode outside the State and was in the State for a temporary or transitory purpose.
Thanks for that reference Silk, it is the one I recall reading. I quickly latched on to the 200 days, which is slightly longer than 183 days, but not by much.

So is there anyone who is pretty familiar with state tax lingo, or particularly familiar with snowbirding to HI, that can give me their interpretation of what that means.

For example, if I maintain my property, driver's license, and voting registration in NH, and of course travel between the two locations each year, may I reasonably consider myself for tax purposes a NH resident and NOT a HI resident?

If my only income comes from interest, dividends, capital gains and eventually social security and RMDs, will any of that be considered taxable income in HI? Am I required to fill out an HI resident, non-resident, or part-time resident tax form each year?

I would read the referenced guidance and personally conclude I need not worry about it. I pay NH income tax on my interest and dividends as required each year.

So, I welcome anyone's informed opinions on how I need to proceed.

Thanks, EV-

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Thu Nov 08, 2018 12:39 pm

Is there something in is these words that leave it unclear that you would not be taxed on income not earned in Hawaii as a non resident? If not then then this would seem to answer your question. The plain read is that if you are a Nonresident, don't have income from Hawaii source, and aren't married to a Hawaii resident then you don't have to file an income tax return.
Nonresident:

A Hawaii nonresident is an individual who is in Hawaii for a temporary or transient purpose, and whose permanent domicile is not Hawaii.

A nonresident must file an Individual Income Tax Return Nonresident and Part-Year Resident (Form N-15), if required to do so. A nonresident will be taxed on income from Hawaii sources only. A nonresident married to a Hawaii resident may choose to file a joint return with the resident spouse on Form N-11, N-12, or N-13; however, the nonresident will then be taxed on all income from all sources.
I searched and reviewed the instructions for Hawaii tax return and for non residents and find this definition.
Domicile Defined
The term “domicile” means the place where an individual has a true, fixed,
permanent home and principal establishment
, and to which place the individual
has, whenever absent, the intention of returning. It is the place in which
an individual has voluntarily fixed the habitation of himself or herself and family,
not for a mere special or temporary purpose, but with the present
intention of making a permanent home. Three things are necessary to
create a new domicile: first, abandonment of the old domicile; second, the
intent to establish a new domicile; and third, actual physical presence in the
new domicile. Once a domicile is established, the intent to abandon it is not
itself sufficient to create a new domicile; a new domicile must be shown
The return can be found with this link.

https://www.google.com/url?sa=t&rct=j&q ... oXnF8O1t6

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Cruise
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Re: Snowbirding in HI

Post by Cruise » Thu Nov 08, 2018 9:26 pm

Sorry, but Silk's information is not correct. Please see the following:

"Part-Year Resident
A part-year resident is an individual who was a Hawaii resident for part of
the year, and who was a nonresident during the other part of the year. This
includes those who moved to Hawaii during the year and those who moved
away from Hawaii during the year.
A part-year resident must fi le an Individual Income Tax Return—Nonresident
and Part-Year Resident (Form N-15), if required to do so. A part-year resident
will be taxed on all income from all sources during the period of residency
, and
on income from Hawaii sources only during the period of nonresidency."

Source: http://files.hawaii.gov/tax/forms/2017/n15ins.pdf

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Thu Nov 08, 2018 9:35 pm

Cruise wrote:
Thu Nov 08, 2018 9:26 pm
Sorry, but Silk's information is not correct. Please see the following:

"Part-Year Resident
A part-year resident is an individual who was a Hawaii resident for part of
the year, and who was a nonresident during the other part of the year. This
includes those who moved to Hawaii during the year and those who moved
away from Hawaii during the year.
A part-year resident must fi le an Individual Income Tax Return—Nonresident
and Part-Year Resident (Form N-15), if required to do so. A part-year resident
will be taxed on all income from all sources during the period of residency
, and
on income from Hawaii sources only during the period of nonresidency."

Source: http://files.hawaii.gov/tax/forms/2017/n15ins.pdf
Sorry Cruise but you are incorrect. This section that you quoted refers to people that are ACTUALLY permanent residents for a part of the year - as in they lived in the state as a permanent resident and moved out the state permanently or vice versa. Not snowbirds that have a permanent residence in another state. To be fully educated you need to read everything in context as I did.

Cheers

Cruise
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Re: Snowbirding in HI

Post by Cruise » Thu Nov 08, 2018 9:39 pm

Silk McCue wrote:
Thu Nov 08, 2018 9:35 pm
Cruise wrote:
Thu Nov 08, 2018 9:26 pm
Sorry, but Silk's information is not correct. Please see the following:

"Part-Year Resident
A part-year resident is an individual who was a Hawaii resident for part of
the year, and who was a nonresident during the other part of the year. This
includes those who moved to Hawaii during the year and those who moved
away from Hawaii during the year.
A part-year resident must fi le an Individual Income Tax Return—Nonresident
and Part-Year Resident (Form N-15), if required to do so. A part-year resident
will be taxed on all income from all sources during the period of residency
, and
on income from Hawaii sources only during the period of nonresidency."

Source: http://files.hawaii.gov/tax/forms/2017/n15ins.pdf
Sorry Cruise but you are incorrect. This section that you quoted refers to people that are ACTUALLY permanent residents for a part of the year - as in they lived in the state as a permanent resident and moved out the state permanently or vice versa. Not snowbirds that have a permanent residence in another state. To be fully educated you need to read everything in context as I did.

Cheers
Well, we can agree to disagree, but in the end, the OP should consult a CPA about this.

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Thu Nov 08, 2018 9:51 pm

Cruise wrote:
Thu Nov 08, 2018 9:39 pm
Well, we can agree to disagree, but in the end, the OP should consult a CPA about this.
I won’t agree. You simply grabbed one paragraph from the same document that I used as a reference, found something that looked like it might apply to the OP’s situation and failed to discern which part applied to them. Re-read my post from 1:39 this afternoon and note that I quote the salient sections from the same document you referenced that applies to their scenario. If your interpretation was correct and I rented an AirBnB for a month I’d have to file a tax return with the state. That would be ludicrous.

Slow down, go back and read everything if you want to refute this. I spent real time today trying to help the OP.

East Coast bedtime. Have a good night.


Cheers

Cruise
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Re: Snowbirding in HI

Post by Cruise » Thu Nov 08, 2018 9:55 pm

Silk McCue wrote:
Thu Nov 08, 2018 9:51 pm
Cruise wrote:
Thu Nov 08, 2018 9:39 pm
Well, we can agree to disagree, but in the end, the OP should consult a CPA about this.
I won’t agree. You simply grabbed one paragraph from the same document that I used as a reference, found something that looked like it might apply to the OP’s situation and failed to discern which part applied to them. Re-read my post from 1:39 this afternoon and note that I quote the salient sections from the same document you referenced that applies to their scenario. If your interpretation was correct and I rented an AirBnB for a month I’d have to file a tax return with the state. That would be ludicrous.

Slow down, go back and read everything if you want to refute this. I spent real time today trying to help the OP.

East Coast bedtime. Have a good night.


Cheers
Why such an angry tone? Maybe need more sleep? Goodnight.
Last edited by Cruise on Thu Nov 08, 2018 10:31 pm, edited 1 time in total.

Cruise
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Re: Snowbirding in HI

Post by Cruise » Thu Nov 08, 2018 9:56 pm

duplicate.

HIinvestor
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Re: Snowbirding in HI

Post by HIinvestor » Thu Nov 08, 2018 11:33 pm

I live in HI. Honestly, if it were me contemplating something similar, I’d print out the info provided in this thread and entire context of the relevant cited provisions and run it past my CPA. I never like expensive surprises that can be minimized with proper planning.

typical.investor
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Re: Snowbirding in HI

Post by typical.investor » Thu Nov 08, 2018 11:50 pm

Why the argument?

If you are in Hawaii for over 200 days, you will get taxed.

If less, you are not a part time resident and Hawaii only income is taxed***

***it doesn’t apply to the OP, but if someone lived there for part of the year without having a domicile elsewhere during that time, they’d be considered a part time resident.

So I agree Silk’s interpretation seems clearly correct.

nalor511
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Re: Snowbirding in HI

Post by nalor511 » Fri Nov 09, 2018 3:05 am

The bottom line is that any state taxing agency can come after you if they have reason to believe your domicile is in their state. CA and NY are known for this. You'll never get a concrete answer that says you're fine, because it's a bit up to interpretation. The passages pasted and interpreted seem to indicate you'll be ok though, since things like driver license are usually key to domicile. Not to say that some eager auditor may not still decide to go after you someday. But you can always fight it if they do, just might be time consuming and/or expensive, because they don't care how long it takes or how much it costs, they're getting paid a salary by the state.

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Escape Velocity
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Re: Snowbirding in HI

Post by Escape Velocity » Fri Nov 09, 2018 6:22 am

Hi Folks, OP here.

I appreciate Silk's help here, and agree with that interpretation. Sorry for any acrimony my inquiry may have triggered.
typical.investor wrote:
Thu Nov 08, 2018 11:50 pm
Why the argument?

If you are in Hawaii for over 200 days, you will get taxed.

If less, you are not a part time resident and Hawaii only income is taxed***

***it doesn’t apply to the OP, but if someone lived there for part of the year without having a domicile elsewhere during that time, they’d be considered a part time resident.

So I agree Silk’s interpretation seems clearly correct.
Typical.Investor are you sure about the 200 days as a hard limit? I would agree I am "safe" if I stay below that, but as their documentation points out:
An individual domiciled outside Hawaii is presumed to be a resident if he or she spends more than 200 days in Hawaii during the taxable year. This presumption may be overcome by evidence satisfactory to the Department of Taxation that the individual maintained a permanent place of abode outside the State and was in the State for a temporary or transitory purpose.
Do you (or any one else) think that having my primary residence in NH (for over 35 years), rental property in MA (for over 10 years), driver's license from NH, and voting registration in NH would (likely) be "satisfactory evidence". And of course if anyone has any experience with HI about such a situation, that would be great.

Appreciate all of the replies and discussion so far.

EV-

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Escape Velocity
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Re: Snowbirding in HI

Post by Escape Velocity » Fri Nov 09, 2018 6:33 am

OP here (again). Just noticing nalor511's reply. Thanks for your take on my situation. Good point on "you may win, but it might cost you". A good practical consideration ;-)

I think this probably means to me, stay under 200 days, and if, on occasion that is exceeded, I'd probably have a good argument if needed. But if exceeded routinely and regularly, I better plan to pay HI tax.

So a final question if I might. If my only income in the next 10 years is interest, dividends, and capital gains, how does one determine whether that is subject to HI or NH taxes? Is it based on where I resided when the income was received, or just divided based on percent time in each state? Remember, there would be no income from a HI business or corporate income while I was located in HI.

Thanks again,

EV-

typical.investor
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Re: Snowbirding in HI

Post by typical.investor » Fri Nov 09, 2018 6:42 am

Escape Velocity wrote:
Fri Nov 09, 2018 6:33 am
OP here (again). Just noticing nalor511's reply. Thanks for your take on my situation. Good point on "you may win, but it might cost you". A good practical consideration ;-)

I think this probably means to me, stay under 200 days, and if, on occasion that is exceeded, I'd probably have a good argument if needed. But if exceeded routinely and regularly, I better plan to pay HI tax.

So a final question if I might. If my only income in the next 10 years is interest, dividends, and capital gains, how does one determine whether that is subject to HI or NH taxes? Is it based on where I resided when the income was received, or just divided based on percent time in each state? Remember, there would be no income from a HI business or corporate income while I was located in HI.

Thanks again,

EV-
It's based on where you are legally a resident. If you stay under 200 days in Hawaii and have a domicile elsewhere, you will be only be taxed by NH.

Have you ever heard of anyone paying taxes to a state because they were vacationing there when a dividend was paid, or having to pay taxes on 1/26 of the dividend because their vacation there was two weeks long?

But yeah, like other's say, you might want to consult a tax professional if you plan on staying longer than 200 days and rely on having a "good argument" for why you shouldn't be considered a resident.

I'd argue you would lose if you are renting a place year round or own property. Consider these cases: example 6) over 200 days but a non resident because work there was temporary and example 7) over 200 days but a resident because the stay there is indefinate

III. Establishing Residency by Residing in HawaiiAn individual who is not domiciled in Hawaii may acquire the status of a resident byvirtue of being physically present in Hawaii for other than temporary or transitory purposes. Seesection 235-1, HRS (Definition of “Resident”).Whether or not the purpose for which an individual is in Hawaii will be consideredtemporary or transitory in character will depend upon the facts and circumstances of eachparticular case.If an individual is simply passing through Hawaii to another state or country, or is herefor a brief rest or vacation, the individual is in Hawaii for temporary or transitory purposes. Also, if an individual's presence in Hawaii is required for a short period to complete a particulartransaction or perform a particular contract, the individual will be deemed to be in Hawaii for atemporary or transitory purpose and will not be deemed a resident.If, however, an individual is in Hawaii to improve the individual's health and theindividual's illness is of such a character as to require a long or indefinite period to recuperate, orthe individual is here for business purposes which will require a long or indefinite period toaccomplish, or is employed in a position that may last permanently or indefinitely, or has retiredfrom business and moved to Hawaii with no definite intention of leaving shortly thereafter, theindividual is in Hawaii for other than a temporary or transitory purpose and will be deemed aresident.If an individual has been in Hawaii more than 200 days of the taxable year in theaggregate (not consecutive), the individual is presumed to have been a resident of Hawaii fromthe time of the individual's arrival. The presumption may be overcome if the individual rebutsthe presumption with evidence satisfactory to the Department of Taxation that the individualmaintains a permanent place of abode outside of Hawaii and is in Hawaii for a temporary ortransitory purpose.

Example 6: G, a civil engineer, is domiciled in New York where G owns a house inwhich G’s family lives. G votes in New York, maintains a bank account there and returns to hishome in New York whenever possible. G is employed by a company as supervising engineer ofits projects. In 1995, the company enters into a contract for construction work in Hawaii whichwill require G to spend 18 months in Hawaii. G comes to Hawaii and spends nearly the whole of1995 here, living in a rented apartment. G's spouse and family remain in New York except for asummer visit to Hawaii. Upon completion of the project, G will return to New York to awaitanother assignment.Conclusion: Since G has been in Hawaii more than 200 days of the taxable year in theaggregate, G is presumed to have been a resident of Hawaii from the time of G’s arrival. G,however, rebuts the presumption under the above circumstances showing that G maintains a

Example 7: H, a civil engineer, is domiciled in California. H is employed by a companyin California. In 1991, H was transferred to Hawaii with the same company. H did not requestthe transfer to Hawaii. The transfer was made for the convenience of H’s employer and H wasrequired to work indefinitely in Hawaii or lose H’s position with the company. H’s spouse andchildren accompanied H to Hawaii. H has always considered California to be H’s permanenthome and always intended to return to California. No affirmative steps were taken either toabandon the domicile in California or to establish a permanent domicile in Hawaii.Conclusion: H is deemed to be a resident of Hawaii. Although H is domiciled in California, H isin Hawaii for other than a temporary or transitory purpose since H’s employment in Hawaii is foran indefinite period.

*** current tax forms advise seeing TAX INFORMATION RELEASE NO. 97-1 which is above. It's dated and but I can't see to find newer one. Maybe it still stands.

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Fri Nov 09, 2018 7:53 am

For what it's worth, I wouldn't even touch the 200 day limit let alone drift over a few days. The taxman can be ruthless and a nosy neighbor that feels you are taking advantage of the limit can report you. Yes, there really are people that will do that. I'm actually surprised at the generosity Hawaii grants at 200 days rather than 6 months.

Absent an ironclad official opinion in writing from the state; once you go beyond 200 days you become subject to the judgement of individuals within a bureaucracy. That is not someplace I would ever want to be when taxes are on the line.

We will be spending up to half a year in our place in the mountains of NC, and like our parents will be careful not to stray over the line.

BTW - its pretty exciting to think about Snowbirding in Hawaii.

Cheers

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heartwood
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Re: Snowbirding in HI

Post by heartwood » Fri Nov 09, 2018 8:39 am

Escape Velocity wrote:
Wed Nov 07, 2018 9:07 pm
Hi folks,

I'm wondering if any BHers have experience snowbirding in Hawaii?

We're going to try it for the first time this year. We currently reside in NH. We own 2 properties in NH, 1 in HI, and a rental property in MA; we have lived for 35+ years in NH and that is our permanent residence. We have our drivers licenses from NH, and are registered to vote in NH.

Now here is my question (again, for folks that have specific experience with the State of Hawaii): What are the restrictions, if any, as to how long we are allowed to be physically present in HI and not trigger some residency/tax consequences?

We've done some research that seemed to indicate the presumed 6-month minus 1-day limit might not be the limit for Hawaii. From what I read (and cannot find the article at the moment), it appeared to be longer than that was allowable.

We have no specific plans, and for sure this year it will be less than 6 months in HI. But we certainly would prefer to have the flexibility to go over 6 months if it did not get us into any problems with the state. We intend and prefer to maintain NH as our official residence.

Thanks in advance for anyone that knows this area well, and can explain the rules. (And if you happen to be able to cite the appropriate documentation, so much the better).

EV-

(p.s., I'm guessing this is the preferred forum; if not, the moderator is encouraged to move it accordingly.)
I wouldn't necessarily characterize 6 months as snowbirding, more like a 2nd home. We do about 5 months a year in HI. We do have some income from rental property in the State so we do file state tax returns even though we are not residents. We maintain an East Coast residence, drivers licenses, billing address, etc. We pay State taxes on the East Coast.

Just a sidebar: Have you spent extended time in the islands? What island? I suggest to people planning extended stays, "what will you do the 3rd week?" All the islands are wonderful and different from each other. Maui, Big Island, Kauai, Lanai, Molokai all have their allures and beaches. Oahu has those and some of the advantages of a city: museums, more restaurants, etc. That said it's a small island, essentially 45 x 30 miles with lots of mountains. Its easy to get island fever. Many locals do annual or more trips to the mainland. We started with a 10 day vacation trip to several islands, then one month on Oahu, then two, then three months. Then we bought a place.

If you own the property in HI you probably know all of this already. Enjoy yourself!

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HueyLD
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Re: Snowbirding in HI

Post by HueyLD » Fri Nov 09, 2018 8:52 am

Silk McCue wrote:
Fri Nov 09, 2018 7:53 am
For what it's worth, I wouldn't even touch the 200 day limit let alone drift over a few days. The taxman can be ruthless and a nosy neighbor that feels you are taking advantage of the limit can report you. Yes, there really are people that will do that. I'm actually surprised at the generosity Hawaii grants at 200 days rather than 6 months.

Absent an ironclad official opinion in writing from the state; once you go beyond 200 days you become subject to the judgement of individuals within a bureaucracy. That is not someplace I would ever want to be when taxes are on the line.

We will be spending up to half a year in our place in the mountains of NC, and like our parents will be careful not to stray over the line.

BTW - its pretty exciting to think about Snowbirding in Hawaii.

Cheers
Yes indeed.

I think Hawaii is very generous with days because it wants snowbirds' and tourists' money. There are other states that also welcome snowbirds with generous number of days allowance.

It is not possible to drive to Hawaii from the mainland. But I do know people who spend more than the default number of days in a snowbird state by discreetly returning to their snowbird home and using only cash and prepaid Visa cards to stay under the radar.

money_bunny
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Re: Snowbirding in HI

Post by money_bunny » Fri Nov 09, 2018 8:59 am

Does the clock reset for the OP on January 1st? 200 continuous days or 200 days in a row?

For example if he lives there October to April?

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Fri Nov 09, 2018 9:03 am

money_bunny wrote:
Fri Nov 09, 2018 8:59 am
Does the clock reset for the OP on January 1st? 200 continuous days or 200 days in a row?

For example if he lives there October to April?
The clock resets each calendar year. However that doesn't buy them anything because each year they will, in this example, have Jan - Apr plus Oct - Dec if they do this year after year.

Cheers

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TimeRunner
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Re: Snowbirding in HI

Post by TimeRunner » Fri Nov 09, 2018 9:26 am

In thinking about this, I wondered if OP owned a vehicle in Hawaii, and if so, if it was registered in Hawaii (e.g. had Hawaii plates). I could see that as a potential issue.
"What'd ya expect in an opera, a happy ending?" -Bugs Bunny. "You gotta fight for your right to party!" -Beastie Boys

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HueyLD
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Re: Snowbirding in HI

Post by HueyLD » Fri Nov 09, 2018 10:22 am

Yes, the thorny issues associated with automobile registration.

In a snowbird state I am familiar with, if someone is stopped by the police for any reason and he has spent more than the default upper limit days in the snowbird state while holding a driver's license in one state and vehicle registration in another, he could be in a lot of trouble.

money_bunny
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Re: Snowbirding in HI

Post by money_bunny » Fri Nov 09, 2018 10:32 am

Especially since the OP won't be driving to Hawaii. Didn't think of that.

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Escape Velocity
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Re: Snowbirding in HI

Post by Escape Velocity » Sun Nov 11, 2018 11:50 am

Hi folks, OP here. Thanks for the continued feedback.
typical.investor wrote:
Fri Nov 09, 2018 6:42 am
Escape Velocity wrote:
Fri Nov 09, 2018 6:33 am
So a final question if I might. If my only income in the next 10 years is interest, dividends, and capital gains, how does one determine whether that is subject to HI or NH taxes? Is it based on where I resided when the income was received, or just divided based on percent time in each state? Remember, there would be no income from a HI business or corporate income while I was located in HI.
It's based on where you are legally a resident. If you stay under 200 days in Hawaii and have a domicile elsewhere, you will be only be taxed by NH.

Have you ever heard of anyone paying taxes to a state because they were vacationing there when a dividend was paid, or having to pay taxes on 1/26 of the dividend because their vacation there was two weeks long?

But yeah, like other's say, you might want to consult a tax professional if you plan on staying longer than 200 days and rely on having a "good argument" for why you shouldn't be considered a resident.

I'd argue you would lose if you are renting a place year round or own property. Consider these cases: example 6) over 200 days but a non resident because work there was temporary and example 7) over 200 days but a resident because the stay there is indefinate
Thanks Typical.Investor. That does sound persuasive. So I think we will have to limit stays to 200 days or less if we want to avoid HI taxation non-HI sources of income.

And thanks to the other posters that also helped me better understand. For example:

Regarding home and auto. Yes we do own a home on Oahu, and rented it out the past two years, and therefore have filed HI tax returns even though the property does not generate taxable income (after depreciation). And yes, we will keep a car there for the time when we snowbird back, and that will be registered in HI. I don't think that changes anything so long as we limit ourselves to <200 days in HI, as we will maintain property, registered cars, and our driver's license in NH, and will vote in NH.

Interesting point about the days-in-HI clock. Assuming that's a hard limit to avoid any potential issues, then it would seem we could conceivably stay longer across the New Year's boundary, if we then decide to vacation elsewhere the following year (e.g., we have an RV and envision some winters touring the Southwest Mainland).

Fair enough point that 6 months really isn't snow-birding. But since we do it to escape the snow, that's how we picked the name. Really, I'm just investigating the possible constraints in case we feel like spending more time in HI as we get older (something I can imagine being possible).

Thanks to all for the inputs (and research on our behalf). Greatly appreciated! :sharebeer

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TimeRunner
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Re: Snowbirding in HI

Post by TimeRunner » Sun Nov 11, 2018 1:05 pm

Seems like you are a part-year resident, filing a tax return with a residence in Hawaii and an auto registered and kept in Hawaii year round. But I'm not a tax attorney. Seems like you would be wise to consult one, IMO. Good luck!
"What'd ya expect in an opera, a happy ending?" -Bugs Bunny. "You gotta fight for your right to party!" -Beastie Boys

Silk McCue
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Re: Snowbirding in HI

Post by Silk McCue » Sun Nov 11, 2018 1:11 pm

TimeRunner wrote:
Sun Nov 11, 2018 1:05 pm
Seems like you are a part-year resident, filing a tax return with a residence in Hawaii and an auto registered and kept in Hawaii year round. But I'm not a tax attorney. Seems like you would be wise to consult one, IMO. Good luck!
As previously quoted in a response above they do not rise to the level of part-year resident.
Part-Year Resident:

A part-year resident is an individual who was a Hawaii resident for part of the year, and who was a nonresident during the other part of the year. This includes those who moved to Hawaii during the year and those who moved away from Hawaii during the year.
You really need to read all of the various definitions from the regulations in order to identify which one applies to the individual circumstances.

Cheers

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HueyLD
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Re: Snowbirding in HI

Post by HueyLD » Sun Nov 11, 2018 1:52 pm

+1 for Silk McCue.

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TimeRunner
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Re: Snowbirding in HI [Residency requirements for tax purposes]

Post by TimeRunner » Sun Nov 11, 2018 6:30 pm

OK, cool. We may do the same one day from California. :beer
"What'd ya expect in an opera, a happy ending?" -Bugs Bunny. "You gotta fight for your right to party!" -Beastie Boys

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