For New York's '548-day rule,' do the days a taxpayer's minor child spends in New York at a legally separated spouse's home count against the taxpayer, and what about scheduled visitation days?

Plain-English summary

Petitioner is a New York domiciliary planning to live and work in a foreign country, and he expects to satisfy the "548-day rule" (Tax Law § 605(b)(1)(A)(ii)) with respect to his own time spent in and out of New York and the U.S. That rule lets a New York domiciliary avoid being taxed as a resident if, over a consecutive 548-day period, the person spends at least 450 days in a foreign country, and the person, spouse (unless legally separated), and minor child are present in New York for no more than 90 days.

The complication is his marriage. Petitioner is married with one minor child, but will be legally separated (and eventually divorced) from his spouse while overseas. Under their custody agreement, the child lives primarily with the spouse, who Petitioner expects will reside in Manhattan. Petitioner has visitation rights on certain weekends, holidays, and school breaks, plus a possible "mid-week" access subject to the child's preference and the mother's consent, and the agreement lets the parties set a specific access calendar for portions of the 548-day period. Petitioner asked whether the child's time in New York with the separated spouse counts against him under the 548-day rule.

The Department concluded that once Petitioner and his spouse are legally separated, the child's ordinary time living with the spouse at her New York residence does not count as the child's presence in New York for 548-day rule purposes. It relied on the 2009 amendment (Chapter 57, Part A-1) that excludes a legally separated spouse's own New York residency from the count, finding nothing in the legislative history suggesting a minor child's time with that separated spouse should be treated differently. However, days the child spends in New York while Petitioner himself is exercising custody or visitation under the parties' agreed access calendar do count. Vague, non-specific "mid-week" days in the agreement do not count unless Petitioner is actually granted and exercises access on specified days, and under 20 NYCRR 105.20(c), any part of a day spent in New York counts as a full day (except pure travel through or to a destination outside the state).

What this means for you

New York domiciliaries relying on the 548-day rule while separated

If you're pursuing nonresident treatment under the 548-day rule and are legally separated from your spouse, your minor child's ordinary time living with the separated spouse in New York does not count against your 90-day limit. But any day the child is in New York exercising custody or visitation time that is actually yours under an access calendar you and your spouse agreed to does count - so track your specific visitation days carefully.

Drafting and using custody/access agreements

A written separation agreement giving the spouse physical custody is central to this result. Loosely worded provisions (like unscheduled "mid-week" access) will not count as your time unless you actually exercise access on specific, identifiable days. Getting a concrete access calendar in place, and keeping records of days actually exercised, protects your 548-day rule position.

Common questions

Q: Does a minor child's time in New York with a legally separated spouse count toward the taxpayer's 90-day limit under the 548-day rule?
A: No. Once the taxpayer and spouse are legally separated under a written custody agreement giving the spouse physical custody, the child's ordinary residence-time with that spouse in New York is not counted.

Q: Do the taxpayer's own visitation or custody days with the child in New York count?
A: Yes. If the child is present in New York on a day when the taxpayer is entitled to custody or visitation under the parties' agreed access calendar, that day counts toward the 548-day rule computation.

Q: What about the agreement's "mid-week" access provision?
A: Non-specific "mid-week" days do not count as time spent by the child in New York unless the taxpayer is actually granted and exercises access on specified days.

Q: Why did the 2009 law change matter here?
A: Chapter 57 of the Laws of 2009, Part A-1, added the parenthetical excluding a legally separated spouse's own presence from the 548-day rule's 90-day count; the Department found no legislative history suggesting the child's time with that spouse should be treated any differently.

Q: How is a partial day in New York counted?
A: Under 20 NYCRR 105.20(c), any part of a calendar day spent in New York counts as a full day, except when the presence is strictly for travel to a destination outside the state or while passing through the state.

Citations and references

• Tax Law § 605(b)(1)(A)(ii) - the "548-day rule": a New York domiciliary is not treated as a resident if present in a foreign country 450+ days within a 548-day period, and the taxpayer, spouse (unless legally separated), and minor child are present in New York no more than 90 days
• Chapter 57 of the Laws of 2009, Part A-1 - amended the resident-individual definition and added the exclusion of a legally separated spouse's New York presence from the 548-day rule count
• 20 NYCRR 105.20(c) - any part of a calendar day spent in New York State counts as a full day, except for pure travel to or through the state

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_2012.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a12_3_1i.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-12(3.1)I
Income Tax
April 11, 2013

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
MODIFIED ADVISORY OPINION

PETITION NO. I120228A

The Department of Taxation and Finance received a Petition for Advisory Opinion from
name redacted on behalf of name redacted. Petitioner asks whether time spent by Petitioner’s
minor child in New York State with a separated spouse should be counted for purposes of
determining if Petitioner qualifies for the “548 Day rule” provided for in Tax Law section 605.
We conclude that the days spent by Petitioner’s minor child in New York State at a residence of
a separated spouse are not counted in determining whether the Petitioner is an excepted resident
pursuant to the “548 Day rule” for New York State income tax purposes. However, if
Petitioner’s minor child is present in New York on any day when the Petitioner is entitled to
custody or visitation pursuant to the access calendar created and agreed to by Petitioner and his
spouse, these days count towards determining residence or domiciliary status for purposes of the
“548 day rule”.
Facts
Petitioner is a New York domiciliary who intends to live and work in a foreign country.
For the foreseeable future, he expects to meet all of the requirements of the “548-day rule” with
regard to his own time in and out of New York and the U.S.
Petitioner is also married and has one minor child, but he will be legally separated from
his spouse (and eventually divorced) while he is living overseas. Pursuant to a custody
agreement, the child resides primarily with Petitioner’s spouse. Petitioner has certain visitation
rights, permitting the child to stay with him on certain weekends, holidays, and school breaks,
subject to his availability and the child’s schedule. The agreement also permits the possibility
for Petitioner to have “mid-week” access to the child, subject to the child’s preference and the
consent of the mother. In addition, the agreement allows the parties to create an access calendar
to determine the specific dates that each parent will be entitled to parenting time with the child
and, pursuant to the agreement, a set schedule has been created for pertinent portions of
Petitioner’s expected 548-period.
The child otherwise resides with Petitioner’s spouse, and Petitioner has consented to
permit his spouse to reside wherever she chooses. However, he expects that his wife will choose
to reside with their child in Manhattan for the foreseeable future.

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TSB-A-12(3.1)I
Income Tax
April 11, 2013

Analysis
The “548-day rule” is contained in Tax Law Section 605(b)(1)(A)(ii). This provision
states that a New York State domiciliary will not be deemed a New York State resident
notwithstanding his or her domiciliary status if that person:
(1) Within any consecutive 548-day period, is present in a foreign country or
countries for at least 450 days; and
(2) During the period of 548 consecutive days, the taxpayer, the taxpayer's spouse
(unless the taxpayer and spouse are legally separated) and the taxpayer's minor child are
not present in New York State for more than 90 days; and
(3) During the nonresident portion of the taxable years within which the 548-day
period begins and ends, the number of days in which the taxpayer is present in New York
State does not exceed the same ratio to 90 as the number of days in that taxable year
bears to 548.
Chapter 57 of the Laws of 2009, Part A-1 (“Part A-1”) amended the definition of
“resident individual” for determining residency for New York State income tax purposes for
taxable years beginning on or after January 1, 2009. Part A-1 amended subsection (b) of section
605 of the Tax Law. Prior to this, a taxpayer domiciled in New York was not taxed as a resident
if, within any 548 consecutive day period, (1) the taxpayer is present in a foreign county for at
least 450 days, (2) the taxpayer is not present in the state for more than 90 days, and (3) his or
her spouse and minor children do not reside at the taxpayer’s permanent place of abode in
New York for more than ninety days. Under the prior law, a taxpayer who was present in a
foreign country, but whose spouse and minor children resided in New York, was able to avoid
being taxed as a resident by having their spouses and minor children avoid using their permanent
places of abode in New York. Instead, the spouse and children stayed with relatives in
New York, or temporarily rented a hotel room in New York. In these situations, the spouse and
minor children spent more than ninety days in New York, but not at the taxpayer’s permanent
place of abode. Part A-1 closed this loophole by providing that the taxpayer would still be taxed
as a resident in New York, unless the taxpayer’s spouse and minor children are not present in
New York for more than ninety days.
Part A-1 also added the parenthetical language that excluded from consideration under
the 548-day rule the residency of a taxpayer’s legally separated spouse. We reviewed the
legislative history of Part A-1. In our opinion, there is nothing in the legislative history to
suggest that the Legislature intended to have a minor child’s time residing with a legally
separated spouse in New York State count towards the taxpayer’s presence within New York
State for purposes of the 548 day rule.
Therefore, if the taxpayer and his spouse are legally separated, and there is a written
separation agreement providing that the spouse has physical custody of the Petitioner’s minor

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TSB-A-12(3.1)I
Income Tax
April 11, 2013

child, the time spent by the minor child at the spouse’s residence does not count as such child’s
presence in New York State in determining whether Petitioner is a New York resident for
personal income tax purposes. However, if Petitioner’s minor child is present in New York on
any day when the Petitioner is entitled to custody or visitation pursuant to the access calendar
created and agreed to by Petitioner and his spouse, these days count towards determining
residence or domiciliary status for purposes of the 548 day rule. The non-specific “mid-week”
days in the custody agreement would not count as time spent by the minor child in New York
unless Petitioner is actually granted and exercises such access on specified days. The Income
Tax Regulation section 105.20(c) provides that, in counting the number of days spent within and
without New York, any part of a calendar day constitutes a day spent within New York State,
except when such presence is strictly for travel to a destination outside the state, or while
traveling through the State.

DATED: April 11, 2013

NOTE:

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the
facts set forth therein and is binding on the Department only with respect to the
person or entity to whom it is issued and only if the person or entity fully and
accurately describes all relevant facts. An Advisory Opinion is based on the law,
regulations, and Department policies in effect as of the date the Opinion is issued or
for the specific time period at issue in the Opinion. The information provided in this
document does not cover every situation and is not intended to replace the law or
change its meaning.