Sticky States: 5 US States That Chase You for Taxes After You Move Abroad

You’ve done the federal math. FEIE excludes up to $132,900 of earned income. Foreign Tax Credit covers the rest. Your US tax bill drops to near zero. You start packing.

Then you get a letter from your state’s tax authority. They want to know why you didn’t file. They think you still live there. And they might be right — legally.

This is the sticky state problem. Most US expat tax guides focus on federal obligations and skip state taxes entirely. But for residents of California, New York, and a handful of other states, the state tax bill can be larger than the federal one after FEIE.

The 5 Sticky States: State-by-State Breakdown

California: The Most Aggressive Sticky State

California’s Franchise Tax Board (FTB) is notorious for pursuing former residents. The state uses a closer connections test— not just where you physically are, but where your “strongest ties” remain. This includes:

• Real property: Owning or renting a home in California (even keeping an empty apartment) is the single biggest red flag
• Vehicles: Keeping a California-registered vehicle or driver’s license suggests continued domicile
• Voter registration: Remaining on California voter rolls indicates intent to return
• Professional licenses: Active California bar membership, medical license, etc.
• Financial accounts: Maintaining California-based bank accounts and safety deposit boxes
• Family and social ties: Spouse and children remaining in California
• Return visits: Spending more than 45 days per year in California creates a rebuttable presumption of residency

At California’s top marginal rate of 13.3%, the stakes are enormous. A $200,000 earner who fails to properly terminate California residency could owe over $20,000 in state taxes — even while living in Portugal and paying Portuguese taxes.

New York: The “Permanent Place of Abode” Trap

New York uses a two-part test: the 548-day rule and the permanent place of abode test. To be considered a non-resident, you must:

1. Be outside New York for at least 548 days in a consecutive 548-day period
2. Not maintain a “permanent place of abode” in New York during that period
3. Spend no more than 90 days per year in New York

The dangerous part is the “permanent place of abode” definition. If you own a New York apartment — even if it’s rented out — the state may argue you have a permanent place of abode available to you. This is even more aggressive than California’s approach in some respects.

New York City adds an additional 3.876% city income tax on top of the state rate, making the combined top rate over 14%.

How to Legally Terminate State Residency Before Moving Abroad

The good news: you can cleanly terminate state residency. The bad news: it requires systematic action beforeyou leave, not after. Here’s the checklist:

Before you leave (6-12 months prior)

1. Establish domicile in a no-income-tax state — If possible, move to Florida, Texas, Nevada, Wyoming, Washington, South Dakota, Alaska, New Hampshire, or Tennessee first. Live there for 6+ months to establish domicile before going abroad.
2. Sell or terminate your lease — Do not keep an apartment, room, or property available for your use in the sticky state
3. Change your driver’s license — Get a license from the no-tax state or surrender your sticky state license
4. Update voter registration — Register in the new state or cancel your registration
5. Move bank accounts — Transfer primary banking to the no-tax state or a national institution
6. File a change of address — Update USPS, IRS (Form 8822), and all financial institutions
7. Update professional licenses — Transfer or place on inactive status

Document everything

Keep records of: your lease termination date, your new state ID, your voter registration change, your forwarding address setup, and any correspondence with the former state’s tax authority. If the FTB or NY Tax Department audits you, documentation is your defense.

The No-Income-Tax State Bridge Strategy

The most reliable approach for California and New York residents is the bridge strategy:

1. Move to a no-income-tax state (Florida, Texas, etc.) 6-12 months before going abroad
2. Establish genuine domicile: driver’s license, voter registration, bank accounts, lease
3. File a part-year return in the sticky state and a full-year return in the new state
4. Then move abroad from the no-tax state — no state tax follows you

This strategy is well-established and used by thousands of expats. The key is that the intermediate move must be genuine — you need to actually live in the no-tax state, not just change your mailing address.

Common Mistakes That Trigger State Audits

• Keeping a storage unit in the state — This is weaker than keeping an apartment, but California’s FTB has used it as evidence of continued ties
• Using a parent’s address — If you use a family member’s California address for anything official, the FTB may argue you have a place of abode available
• Not filing a part-year return — Failing to file a part-year return for the year you leave creates an assumption of full-year residency
• Returning for extended visits — California’s 45-day presumption and New York’s 90-day limit are hard thresholds
• Keeping a California-licensed vehicle — Even in storage, this is a domicile indicator

What About States Without These Problems?

Most US states use a simpler test: if you’re domiciled elsewhere and spend fewer than 183 days in the state, you’re a non-resident. States like Florida, Texas, Nevada, Wyoming, Washington, South Dakota, Alaska have no income tax at all — making them the ideal departure point for expats.

If you’re currently in a non-sticky state with low or no income tax, the federal FEIE/FTC combination is all you need to worry about. Use our Expat Tax Calculator to estimate your federal savings.

Frequently Asked Questions