Was a New York-domiciled Foreign Service officer taxable as a New York resident during a stateside stint in New Jersey and Washington, D.C. that fell between two overseas assignments otherwise covered by the 548-day nonresident rule?

Plain-English summary

Michael Dodman, a Foreign Service Officer with the U.S. Department of State, was domiciled in New York State (he was born and raised there and his permanent address remained his parents' home in Snyder, New York), but he had not actually lived in New York since 1980. His overseas postings meant he was often away long enough to qualify as a nonresident under New York's "548-day rule" in Tax Law § 605(b)(1)(A)(ii), which treats a domiciliary as a nonresident if, within a 548-consecutive-day period, they are present in a foreign country for at least 450 days and meet related limits on days spent in New York.

Dodman used the 548-day rule to treat himself as a nonresident for a series of periods during his 1994-1998 assignment to the U.S. Embassy in Ankara, Turkey, running through September 22, 1998. When he returned to the United States, however, he did not go straight to another foreign posting. Instead, he and his family lived in Princeton, New Jersey from August 1998 to May 1999 while he completed a State Department-funded Master's program at Princeton University, followed by a stint in Washington, D.C. for training before departing for a three-year assignment in Warsaw, Poland beginning August 16, 1999 (with a new 548-day period starting May 27, 1999).

The question was how to treat the gap between the two 548-day periods - specifically September 23, 1998 through May 26, 1999, when Dodman was in New Jersey and Washington, D.C. rather than overseas. The Department concluded that during this gap Dodman met neither of the two ways a New York domiciliary can be treated as a nonresident: he wasn't in a foreign country long enough to satisfy the 548-day rule, and he didn't maintain a permanent place of abode outside New York, because his New Jersey and Washington, D.C. living arrangements were both temporary stays for a particular purpose (the Princeton program and training, respectively) rather than permanent abodes. As a result, he was a part-year New York resident for that gap period.

What this means for you

Domiciliaries who move between qualifying nonresident periods

If you're domiciled in New York but rely on the 548-day foreign-presence rule to be treated as a nonresident, watch the transitions between overseas assignments closely. A stateside gap - even one spent for a specific, temporary purpose like schooling or training - can break your nonresident status unless you separately maintain a permanent place of abode outside New York and meet the other conditions of Tax Law § 605(b)(1)(A)(i) during that gap.

Foreign Service and other frequently-relocated employees

Temporary government or employer-directed stays (such as a training assignment or an educational program tied to your job) are not automatically treated as a "permanent place of abode" under 20 NYCRR 105.20(e)(1), even if you rent or maintain a home there for many months. That distinction can determine whether you owe New York tax as a resident for the gap period.

Common questions

Q: Why wasn't Dodman's time in Princeton, New Jersey enough to keep him a nonresident?
A: Because he wasn't present in a foreign country during that period, the 548-day rule under Tax Law § 605(b)(1)(A)(ii) didn't apply, and his Princeton home was a temporary stay for the particular purpose of his Master's program - not a "permanent place of abode" under 20 NYCRR 105.20(e)(1) - so the alternative nonresident test in § 605(b)(1)(A)(i) also failed.

Q: Did the Department decide whether Dodman's earlier 1994-1998 overseas periods actually qualified under the 548-day rule?
A: No. The opinion expressly assumed, without deciding, that Dodman met the 548-day rule's requirements for the periods through September 22, 1998, and again beginning May 27, 1999; that assumption was not itself at issue.

Q: For which exact dates was Dodman treated as a part-year New York resident?
A: September 23, 1998 through December 31, 1998, and January 1, 1999 through May 26, 1999 - the portion of the gap between his two 548-day overseas periods, corresponding to his time in New Jersey and then Washington, D.C.

Q: Who has the burden of proving nonresident status in a situation like this?
A: Under 20 NYCRR 105.20(b), a person domiciled in New York who claims nonresident status for a year or partial year bears the burden of showing they satisfied the requirements of Tax Law § 605(b)(1)(A)(i) or (ii).

Citations and references

• Tax Law § 605(b)(1)(A) - defines a "resident individual" as one domiciled in New York unless a listed exception applies
• Tax Law § 605(b)(1)(A)(i) - nonresident exception for maintaining no permanent place of abode in New York, maintaining one elsewhere, and spending 30 days or fewer in New York
• Tax Law § 605(b)(1)(A)(ii) - the 548-day rule for individuals present in a foreign country for at least 450 of 548 consecutive days, subject to limits on days spent in New York
• 20 NYCRR 105.20(b) - a domiciliary remains a nonresident only while meeting § 605(b)(1)(A)(i) or (ii); the taxpayer bears the burden of proof
• 20 NYCRR 105.20(e)(1) - defines "permanent place of abode" and excludes a dwelling maintained only during a temporary stay for a particular purpose

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_2001.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a01_4i.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-01(4)I
Income Tax
July 31, 2001

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I010131A

On January 31, 2001, a Petition for Advisory Opinion was received from Michael Dodman,
Department of State, 5010 Warsaw Place, Washington, D.C., 20521-5010.
The issue raised by Petitioner, Michael Dodman, is whether he is taxable as a resident of New
York State during a period of study in New Jersey in 1998-1999, which fell between two extended
overseas assignments when he was treated as a nonresident of New York State pursuant to the 548
day rule under section 605(b)(1)(A)(ii) of the Tax Law.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner is domiciled in New York State where he was born and raised. He has not lived in
New York State since 1980, although he, his wife and children visit family in Buffalo and the New
York City area nearly every year. The longest period he has been in New York State in any calendar
year since 1984 is three weeks. Petitioner does not own or maintain any property in New York State
and he does not earn any income from New York State sources. Petitioner’s permanent address is
the home of his parents at 80 Thomas Jefferson Lane, Snyder, New York 14226.
Petitioner is a Foreign Service Officer employed by the United States Department of State.
The nature of his work is such that he and his family live overseas for extended periods of time.
Petitioner does not own a permanent place of abode. When posted overseas Petitioner resides in
government owned quarters. During periods of assignment in the United States, he has either rented
or purchased a home for a temporary period. Petitioner currently does not own any real estate.
Petitioner and his family returned to the United States in 1990 following his service at
the United States Embassy in Poland. Petitioner’s 1990 assignment to the State Department in
Washington, D.C. was not fixed. From mid-1990 through mid-1994, he resided and maintained a
home in Arlington, Virginia, which was his permanent place of abode for the period. Petitioner paid
resident taxes in Virginia throughout this period. Petitioner owned a home in Arlington, Virginia
from 1991-1999 in which he lived from 1991-94 and rented it out the remaining years.
From mid-1994 through mid-1998, during the period of his assignment to the Unites States
Embassy in Ankara, Turkey, Petitioner states that he was treated as a nonresident of New York State
based on the 548-day rule under section 605(b)(1)(A)(ii) of the Tax Law. Petitioner used the
following 548 day periods for such determination:

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(1) July 30, 1994 through January 20, 1996 – 527 out of 548 days overseas with travel to
the United States August 7, 1995 to August 27, 1995, including 10 days in New York State.1
(2) January 1, 1996 through July 1, 1997 – 516 out of 548 days overseas with travel to the
United States July 29, 1996 to August 30, 1996, including 13 days in New York State.
(3) March 24, 1997 though September 22, 1998 – 450 out of 548 days overseas with
travel to the United States December 14, 1997 to January 2, 1998, and July 6, 1998 to
September 22, 1998, including 10 days in New York State in 1997, and 19 days in New York
State in 1998. (The number of days in New York during 1998 does not exceed the maximum
number of days allowed under the 548 day rule.)
Petitioner returned to the United States from this assignment on July 6, 1998. Petitioner
states that the last day of his final 548 day period related to this assignment was September 22, 1998.
When he returned to the United States, his travel orders actually listed two assignments, first to
Princeton, New Jersey for the purpose of participating in a 10 month Masters degree program at
Princeton University, then to Warsaw, Poland in the summer of 1999 for a three year tour via a
temporary assignment in Washington, D.C. for training tied to the Poland assignment. The State
Department paid for the degree program, and Petitioner continued to receive his United States
government salary during this period. Although his official duty state during this period was
Washington, D.C., Petitioner and his family maintained a home and resided in Princeton, New Jersey
from August 1998 to May 1999. Petitioner was not considered a New Jersey resident during this
period because he was in New Jersey for a limited period with a particular purpose, and he did not
reside in New Jersey more than 183 days in either 1998 or 1999.
From June 1999 until August 16, 1999, Petitioner was on temporary assignment in
Washington, D. C. for training with respect to the Warsaw, Poland assignment. On August 16, 1999,
Petitioner and his family departed for his current assignment in Warsaw, Poland. This assignment
had been made prior to his leaving Turkey, so that the nature and length of his time in the
United States was clearly defined before actually returning to the United States. Petitioner’s
assignment to Poland is for three years. Petitioner states that his first 548-day period related to this
assignment began May 27, 1999.

1

We note that the dates provided by Petitioner equal a period of 540 days rather than 548 days.
Presumably, the closing date for this period should be January 28, 1996. However, the determination
of whether Petitioner was a resident for such period is not at issue in this Advisory Opinion.

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Income Tax
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It is assumed for purposes of this Advisory Opinion that Petitioner qualified as a nonresident
under section 605(b)(1)(A)(ii) of the Tax Law for the period July 30, 1994 through September 22,
1998, and for the 548 day period beginning May 27, 1999.
Discussion
Section 605(b)(1)(A) of the Tax Law provides that a resident individual means an individual:
who is domiciled in this state, unless (i) he maintains no permanent place of
abode in this state, maintains a permanent place of abode elsewhere, and spends in
the aggregate not more than thirty days of the of the taxable year in this state, or (ii)
(I) within any period of five hundred forty-eight consecutive days he is present in a
foreign country or countries for at least four hundred fifty days, and (II) during such
period of five hundred forty-eight consecutive days he is not present in this state for
more than ninety days and does not maintain a permanent place of abode in this state
at which his spouse (unless such spouse is legally separated) or minor children are
present for more than ninety days, and (III) during the nonresident portion of the
taxable year with or within which such period of five hundred forty-eight consecutive
days begins and the nonresident portion of the taxable year with or within which such
period ends, he is present in this state for a number of days which does not exceed
an amount which bears the same ratio to ninety as the number of days contained in
such portion of the taxable year bears to five hundred forty-eight ....
Section 105.20(b) of the Personal Income Tax Regulations (“Regulations”) provides, in part,
that as long as an individual who is domiciled in New York State continues to meet the requirements
of either section 605(b)(1)(A)(i) or (ii) of the Tax Law, such individual will be considered a
nonresident of New York State for personal income tax purposes. However, where such individual
fails to meet those conditions, such individual will be subject to New York State personal income
tax as a resident. Where an individual domiciled in New York State claims to be a nonresident for
any taxable year (or portion thereof), the burden is upon such individual to show that such individual
satisfied the requirements set forth in section 605(b)(1)(A)(i) or (ii) of the Tax Law.
Section 105.20(e)(1) of the Regulations defines a "permanent place of abode" as a dwelling
place permanently maintained by the taxpayer, whether or not owned by the taxpayer. However, a
place of abode, whether in New York State or elsewhere, is not deemed permanent if it is maintained
only during a temporary stay for the accomplishment of a particular purpose.
In this case, it is assumed that Petitioner met the conditions of section 605(b)(1)(A)(ii) of the
Tax Law with respect to the 548 day rule for an individual present in a foreign country for the period
July 30, 1994 through September 22, 1998. Therefore, for purposes of this advisory opinion it is
assumed that Petitioner was a nonresident of New York State for the period July 30, 1994 through

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September 22, 1998. It is also assumed that Petitioner met the conditions of such section for the 548
day period beginning on May 27, 1999.
With respect to the period at issue, September 23, 1998 through May 26, 1999, Petitioner
was not present in a foreign country and did not meet the requirements of section 605(b)(1)(A)(ii)
of the Tax Law to be treated as a nonresident of New York State pursuant to the 548 day rule.
Petitioner also did not meet the three requirements of section 605(b)(1)(A)(i) of the Tax Law
for the taxable period September 23, 1998 though December 31, 1998 or for the taxable period
January 1, 1999 through May 26, 1999. Petitioner did not have a permanent place of abode in New
York State during such periods. However, Petitioner did not maintain a permanent place of abode
outside of New York State during such periods. Petitioner’s abode in New Jersey from August 1998
to May 1999 was not considered a permanent place of abode because Petitioner was on a temporary
assignment for a particular purpose. Likewise, Petitioner’s assignment in Washington, D. C. from
June 1999 to August 1999, was a temporary assignment for a particular purpose. Therefore, for the
portion of 1998 and 1999 at issue, when Petitioner was not considered a nonresident of New York
State pursuant to the 548 day rule under section 605(1)(A)(ii) of the Tax Law, Petitioner did not meet
the condition of section 605(b)(1)(A)(i) of the Tax Law, described in section 105.20(e) of the
Regulations, that he maintain a permanent place of abode outside of New York State.
Accordingly, for the taxable periods September 23, 1998, through December 31, 1998 and
January 1, 1999 through May 26, 1999, the portion of 1998 and 1999 that Petitioner was not
considered a nonresident of New York State pursuant to the 548 day rule under section
605(b)(1)(A)(ii) of the Tax Law, Petitioner was a part-year resident of New York State pursuant to
section 605(b)(1)(A) of the Tax Law.

DATED: July 31, 2001

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist III
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.