US state taxes after moving to the UK: are you still a resident?

Federal filing follows you everywhere; state filing is supposed to stop when you leave. Whether it actually stops depends on the state and on how cleanly you left.

Domicile is not the same as where you live

States tax on domicile (your permanent home, the place you intend to return to) and on statutory residency (a permanent place of abode plus a day count). Moving to London does not change your domicile by itself. A state can argue you are still domiciled there if you keep a home, a driving licence, voter registration, vehicles, professional licences, or simply keep using a state address on your federal return and bank accounts.

States that take the hardest line

California. Top rate 13.3%. The Franchise Tax Board looks at the closest connections; the 546-day safe harbour for people abroad on employment contracts helps only if the conditions are met. California also sources stock option and RSU income earned while you were resident to California even if it vests years after you leave, and it does not give a credit for foreign tax.

New York. Domicile test plus statutory residency (a permanent place of abode in the state and more than 183 days). New York City adds its own tax. Keeping an apartment in the city while working in London is the classic problem.

New Jersey. Expects clear evidence of a new domicile: home sold or let, registrations moved, memberships changed.

Virginia and Maryland. Less aggressive but both pursue domicile where a home is retained; Maryland adds county tax.

States with no income tax (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire on earned income) present no exit problem.

Breaking residency properly

• Sell or let the home, and document it.
• Swap the state driving licence for a UK one.
• Move bank, brokerage and payroll addresses to the UK.
• Re-register to vote as an overseas voter (for federal elections you keep your last US address; check whether your state treats overseas voter registration as a domicile indicator).
• Cancel or move professional licences and club memberships.
• File a part-year resident return for the departure year showing the move-out date.
• Keep evidence of the UK side: lease or purchase, utilities, bank accounts, National Insurance number.

Income that follows you

• Stock options and RSUs granted while resident: many states tax the portion of the gain attributable to work performed in the state, whenever it vests or is exercised.
• Pensions and IRA distributions: federal law (4 U.S.C. §114) stops states taxing retirement income of non-residents, but what counts as retirement income is defined, and timing of distributions around the move matters.
• Partnership and S-corporation income sourced to a state remains taxable there as non-resident income.
• Rental property in a state means a non-resident return every year.

If you have not filed state returns

Non-filing where a return was due leaves the statute of limitations open. Most states run voluntary disclosure programmes; coming forward is cheaper than waiting for a notice, and the state position should be fixed alongside any federal catch-up.

Frequently asked questions

Do I need a state return if I live in the UK?

Only if you are still domiciled or statutorily resident in a state, or you have income sourced to one. The answer should be worked out, not assumed, for the year you left and the years after.

Can I credit UK tax against state tax?

Usually not. Most states, California included, give no credit for foreign taxes.