Military folks: choosing state for residence

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blaugranamd
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Military folks: choosing state for residence

Post by blaugranamd » Wed Sep 11, 2019 10:46 am

I think I know the answer to this but want to see if there are other factors I might be overlooking. We recently PCS'd from Ohio to Florida and can either maintain Ohio residency or become Florida residents. Ohio will exempt us from state income taxes while stationed outside of Ohio. Florida has no state income tax anyway. We have a 529 account via Ohio, otherwise we will not have any other financial/property connection to the state. I have heard Florida residency will save us on property taxes via a homestead deduction as well? I also believe the Ohio "exemption" is really a deduction when filing taxes, so state taxes would still be deducted throughout the year and returned at filing time, much less ideal. Is there any reason NOT to change our residency from Ohio to Florida?

Thanks in advance! :sharebeer
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dpm321
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Re: Military folks: choosing state for residence

Post by dpm321 » Wed Sep 11, 2019 4:56 pm

Do you plan to return to Ohio at some point? If not then there is probably no real downside to becoming a Florida resident. It has been a while since I retired, so I don't know if rules have changed, but you might want to see if this will impact any right you have to be moved back to your home of record if you retire/separate.

By the way, the Florida homestead exemption is a declaration. It has no impact on your property taxes, which are already pretty low, but is intended to provide you some protection from your home being taken in legal actions.

trueblueky
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Re: Military folks: choosing state for residence

Post by trueblueky » Wed Sep 11, 2019 5:05 pm

Florida exempts $50,000 of home's value from all property tax except for education. $25,000 is exempt for that. Your assessed value cannot go up more than 3% in a year. The events of 2008 lowered assessed values (some areas saw real estate prices halved); they have only slowly gone back up.

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galving
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Re: Military folks: choosing state for residence

Post by galving » Wed Sep 11, 2019 6:17 pm

Florida is pretty attractive because of the lack of state income tax.

Boglegrappler
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Re: Military folks: choosing state for residence

Post by Boglegrappler » Wed Sep 11, 2019 7:26 pm

Just as a matter of being specific, what matters to you is not your residency, but your "domicile".

Domicile generally is where you live, but the military aspect screws that idea up a bit because they muddy the waters with the "home of record" concept.

High tax states will consider you to be domiciled there if you declared them as your "home of record", but there is a process to fix that issue.

This link gives you some insight into the issue.

http://www.ncosupport.com/military-law/ ... dence.html

Here's another link that discusses, for one state at least, how to be a non resident for tax purposes. Can't say if the exact same provisions would apply to other states.
https://portal.ct.gov/DRS/Individuals/I ... n-Military

I think I would file the papers to file as a Florida resident.

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friar1610
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Re: Military folks: choosing state for residence

Post by friar1610 » Wed Sep 11, 2019 7:38 pm

Boglegrappler wrote:
Wed Sep 11, 2019 7:26 pm
Just as a matter of being specific, what matters to you is not your residency, but your "domicile".

Domicile generally is where you live, but the military aspect screws that idea up a bit because they muddy the waters with the "home of record" concept.

High tax states will consider you to be domiciled there if you declared them as your "home of record", but there is a process to fix that issue.

This link gives you some insight into the issue.

http://www.ncosupport.com/military-law/ ... dence.html

Here's another link that discusses, for one state at least, how to be a non resident for tax purposes. Can't say if the exact same provisions would apply to other states.
https://portal.ct.gov/DRS/Individuals/I ... n-Military

I think I would file the papers to file as a Florida resident.

I always understood that "home of record" was not changeable. It's the place from which you entered the service and to which they would pay your transportation home when you left active duty. My further understanding that it was not to be confused with domicile or state of residence. Am I misinformed ? (Not that it really matters any more as I've been retired for > 20 years.)
Friar1610

Guill
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Re: Military folks: choosing state for residence

Post by Guill » Wed Sep 11, 2019 7:52 pm

I always understood that "home of record" was not changeable. It's the place from which you entered the service and to which they would pay your transportation home when you left active duty. My further understanding that it was not to be confused with domicile or state of residence. Am I misinformed ? (Not that it really matters any more as I've been retired for > 20 years.)
[/quote]


You absolutely can change your "home of record." The military doesn't presume to tell you where you must reside after completing your service. I've switched my state of residence to Texas for similar reasons as discussed by the OP.

Fishing50
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Re: Military folks: choosing state for residence

Post by Fishing50 » Thu Sep 12, 2019 8:29 am

We’re FL residents, so we’re able to maintain our homestead exemption on a rental property because we’re on orders away from our residence. Real estate taxes were even waived while I served in the CZTE. While stationed out of FL we were able to register vehicles in FL which was exempt from sales tax.
It's perfectly legal, go ask the IRS, they'll say the same thing. I actually feel stupid telling you this, I'm sure you would've investigated the matter yourself. Andy Dufresne

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friar1610
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Re: Military folks: choosing state for residence

Post by friar1610 » Thu Sep 12, 2019 4:41 pm

Guill wrote:
Wed Sep 11, 2019 7:52 pm
I always understood that "home of record" was not changeable. It's the place from which you entered the service and to which they would pay your transportation home when you left active duty. My further understanding that it was not to be confused with domicile or state of residence. Am I misinformed ? (Not that it really matters any more as I've been retired for > 20 years.)

You absolutely can change your "home of record." The military doesn't presume to tell you where you must reside after completing your service. I've switched my state of residence to Texas for similar reasons as discussed by the OP.
[/quote]

I stand by my post quoted above. You may confusing "home of record" with "state of residence". I googled "home of record" and read a number of sources which said the HOR can't be changed (except in special circumstances such as an error in the first place, a break in active service). See, for example, the Navy Military Personnel Manual (MILPERSMAN):

https://www.public.navy.mil/bupers-npc/ ... 00-100.pdf

The military may not presume to tell you where to live after you leave active service. It does, however, presume to tell you to what location they will pay you to return. And that is to your home of record.

If there is an authoritative source that says otherwise, I would appreciate the chance to review it.
Friar1610

Sophia1884
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Re: Military folks: choosing state for residence

Post by Sophia1884 » Thu Sep 12, 2019 4:54 pm

Great question.

Your home of record (HoR) is where the military picked you up. You get one HoR move in your career- if you don't use it when you join, you can use it at any later time. If you separate before completing your contract, HOR is where you'll be sent back to. If you are retiring, you can pick where you want to be sent (paid for by the military) but your home of record will remain the same...it can't be changed because that's where your Mr. Todd's Wild Ride journey began. :) Thank you for your and your family's service. Your local TMO office will be able to provide any additional details.

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