New York State proposed to eliminate the "temporary stay" exemption for determining whether an individual is a resident for New York State and New York City income tax purposes, effective retroactively to January 1, 2008. An individual who is not domiciled in NY is treated as a resident (subject to NY income tax on his worldwide income) if he maintains a permanent place of abode in NY and is present in NY for more than 183 days during the tax year. Under the current regulations, a place of abode is not considered permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose.
The change, however, would not affect the requirement in the regulations that the place of abode must be maintained for substantially all of the tax year (which NY has interpreted to mean more than 11 months). As a result, if the proposed change is adopted, an individual who is domiciled, resident and working in Massachusetts, whose job required him to move to NY on January 1, 2008, for a 2 year training program, after which time he will return to his home and job in Massachusetts, will be considered a resident of NY during the 2 years he is here, 2008 and 2009. However, if he moved to NY for the 2 years of training sometime after January 2008, he would only be a NY resident for the middle calendar year, since he would not maintain a permanent place of abode in NY during either the first or last calendar year included in his training period.