It is not unusual for high-wealth clients to have more than one home It could be a vacation house, an apartment in the city used for convenience, or dual residences in the Northern and Southern U S for snowbirds Individuals with multiple homes often will select their state of residency to take advantage of the place with the lowest tax rate This is even more important since COVID-19, as travel restrictions and telecommuting may have affected whether clients have met state residency tests, which may leave them with an unexpected tax liability come 2021 and beyond A taxpayer who is not deemed a domicile of a state can nevertheless still be a resident of the state for tax purposes under the statutory residency test The COVID-19 crisis may have led some taxpayers to change their activities in such a way as to affect their residency for tax purposes
COVID-19 Sheltering in Place May Lead to Tax Liability for Clients