MAJ Stephen E. Charkow, a New York domiciliary in the U.S. Army stationed in Germany, plans to retire from active duty at the end of October 1991 and then return to New York State. Will he be treated as a New York nonresident for calendar year 1991, the year he retires?

Plain-English summary

MAJ Stephen E. Charkow, a New York State domiciliary serving in the U.S. Army and stationed in Germany, asked the Department whether he'd be treated as a New York nonresident for calendar year 1991 - the year he plans to retire from active duty at the end of October 1991 and then move back to New York. Charkow knew he could likely satisfy two of the three requirements of New York's "548-day rule," but wasn't sure how to run the math on the third.

The 548-day rule (Tax Law § 605(b)(1)(A)(ii), implemented at Reg. § 102.2(b)(2)) lets a New York domiciliary be treated as a nonresident for a stretch of time if, within any 548 consecutive days, three things are all true: (1) the person is physically present in a foreign country or countries for at least 450 of those days; (2) the person is not present in New York for more than 90 days during that same 548-day window, and doesn't keep a New York home where a spouse or minor children stay more than 90 days; and (3) for any shorter stretch inside that 548-day window that counts as its own separate "taxable period" under Part 148 of the Regulations, the New York days during that shorter stretch don't exceed a proportional slice of the 90-day allowance (calculated as the number of days in the short period divided by 548, times 90).

The opinion walks through a worked example of a hypothetical taxpayer "B" who spent 463 of 548 consecutive days abroad and only 50 days total in New York, and shows that B qualifies as a nonresident for the whole 548-day span because the New York time also stayed under the pro-rated cap for the shorter, less-than-12-month opening stretch of that span.

Applying the same math to Charkow's situation, the Department offered him two different ways to structure his own 548-day window. First, if he picks May 2, 1990 through October 31, 1991 as his 548-day period, spends at least 450 of those days abroad, keeps his total New York days at 90 or under for the whole window, and - because January 1 through October 31, 1991 is itself a shorter "less than 12 months" period within that window - keeps his New York days during just that stretch to 50 or fewer (304 days out of 548, times 90), then he'd be a nonresident only for January 1 through October 31, 1991. He would become a resident again the moment he returns to New York in November 1991, and would stay a resident afterward unless he separately re-qualifies. Second, if he instead picks July 2, 1990 through December 31, 1991 as his 548-day window - building on the fact that he was already a nonresident for the first part of 1990 - the stub period from July 2 through December 31, 1990 wouldn't count as its own separate taxable period under Part 148, so the pro-rated sub-period test wouldn't apply at all. In that case, as long as he doesn't exceed 90 total New York days across the whole window and meets the 450-days-abroad and permanent-abode conditions, he could be treated as a nonresident for the entire 1991 calendar year.

The Department also confirmed a taxpayer-favorable point: vacation days spent in Europe at the tail end of Charkow's active-duty commitment still count toward the 450-days-abroad requirement, they don't have to be duty days. But the burden of proving he actually met the foreign-presence threshold would fall on him in any audit, and the opinion notes that hotel and airline receipts and military orders would be the kind of evidence that could establish it. If Charkow ends up filing as a nonresident or part-year resident (Form IT-203), the Department said he should attach a statement explaining exactly how he satisfies the 548-day rule.

What this means for you

Military servicemembers stationed abroad who plan to return to New York

If you're a New York domiciliary in the armed forces stationed overseas, you don't have to accept New York resident status just because you're planning to move back after retirement or discharge. The 548-day rule lets you pick any 548-consecutive-day window you want (it doesn't have to align with a calendar year), and choosing the window carefully can determine whether you're taxed as a nonresident for part of a transition year or for the whole year. Track your days abroad and days in New York closely in the run-up to any move, because the calculation is date-specific and unforgiving.

Anyone planning a move back to New York mid-year after a long stint abroad

The date you pick as the start (or end) of your 548-day window matters enormously. As this opinion shows, one choice of window can mean nonresident status only through the date you return, while a different, overlapping choice of window - especially one that piggybacks on nonresident status you already had - can extend nonresident treatment through the entire year, because it avoids triggering the pro-rated sub-period test for a "separate taxable period." Modeling out more than one possible 548-day window before you file can materially change your New York tax bill.

Accountants and tax preparers advising expatriate or military clients

Be ready to run the § 102.2(b)(2) three-part test under multiple candidate 548-day windows, since the choice of window is the taxpayer's to make. Remember that vacation days abroad still count toward the 450-day threshold - they don't need to be "duty days" - which can be a favorable fact pattern for military and expatriate clients. Also keep in mind that the burden of proving the foreign-presence day count falls entirely on the taxpayer, so advise clients to preserve hotel/motel receipts, airline tickets, and (for military clients) their orders, and to attach an explanatory statement to Form IT-203 when claiming nonresident or part-year-resident status under this rule.

Common questions

Q: What exactly is the "548-day rule," and how is it different from the ordinary nonresident test?
A: New York's ordinary nonresident test for a domiciliary requires no permanent New York home, a permanent home elsewhere, and no more than 30 days spent in New York for the entire year. The 548-day rule is an alternative path built for people with heavy foreign travel: within any 548 consecutive days (which can span parts of two or three calendar years), the person must be present in a foreign country or countries at least 450 days, must not be in New York more than 90 days during that window (and must not keep a New York home where a spouse or minor children stay more than 90 days), and must not exceed a pro-rated share of that 90-day allowance during any shorter period within the window that counts as its own separate taxable year.

Q: Why does it matter which 548-day period Charkow picks?
A: Because the choice of window changes both which days count and whether the pro-rated sub-period test even applies. Picking May 2, 1990-October 31, 1991 makes January 1-October 31, 1991 a distinct "less than 12 months" period inside the window, capping his New York days there at 50. Picking July 2, 1990-December 31, 1991 instead - relying on nonresident status he already had for part of 1990 - means the opening stub (July 2-December 31, 1990) isn't a separate taxable period under Part 148 at all, so no pro-rated sub-cap applies, and nonresident treatment can extend across the full 1991 year instead of stopping when he returns in October.

Q: Do vacation days count toward the 450-days-abroad requirement, or only days spent on active duty?
A: They count. The opinion specifically holds that days Charkow spends vacationing in Europe at the end of his active-duty commitment are treated as days present in a foreign country for purposes of the 548-day rule - there's no requirement that the days be duty days.

Q: Who has to prove the foreign-presence day count is accurate?
A: The taxpayer does. The Department noted that in any administrative proceeding, the burden falls on Charkow to prove how many days he was present in a foreign country. Because that's a factual question, the advisory opinion couldn't resolve it in advance - but the Department flagged hotel and motel receipts, airline ticket receipts, and military orders as the kind of evidence that would be relevant.

Q: What does Charkow need to do when he files his return if he's relying on this rule?
A: If he ends up filing Form IT-203 (Nonresident and Part-Year Resident Income Tax Return), the Department said he should attach a statement to the return explaining how he satisfies the requirements of the 548-day rule under Regulation § 102.2(b)(2).

Citations and references

• Tax Law § 605(b)(1)(A)(ii) - the statutory 548-day rule allowing a New York domiciliary to be treated as a nonresident based on sufficient foreign presence and limited New York presence
• Reg. § 102.2(b)(1) - the alternative nonresident test requiring no New York permanent abode, a permanent abode elsewhere, and 30 or fewer New York days for the full year
• Reg. § 102.2(b)(2) - the regulatory version of the 548-day rule, including the three-part test (450 foreign days, 90-day New York cap, pro-rated sub-period cap) applied in this opinion
• Regulations Part 148 - governs what counts as a "separate taxable period" for purposes of the 548-day rule's pro-rated sub-period test

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1990.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a90_11i.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-90 (11) I
Income Tax
August 21, 1990

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I900522A

On May 22, 1990, a Petition for Advisory Opinion was received from MAJ Stephen E.
Charkow, VII Corps Liaison Officer, 12 (GE) Panzer Division, APO New York 09036.
The issue raised by Petitioner, MAJ Stephen E. Charkow, is whether he would be considered
a nonresident of New York State for calendar year 1991, the year during which he retires from active
duty with the United States Army.
Petitioner, a domiciliary of New York State, is in the United States Army and is stationed in
Germany. Petitioner plans to retire from active duty at the end of October 1991. After retirement,
Petitioner will return to New York State. Petitioner states that he knows he will meet the first and
second requirements of the 548 day rule set forth in Section 605(b)(1)(ii) of the Tax Law, but is not
sure how to calculate the third requirement of said section.
Section 605(b)(1) of the Tax Law states:
(b) Resident, nonresident, and part-year resident defined.
(1)

Resident individual. A resident individual means an individual:
(A)

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 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 any period of less than twelve months, which would be
treated as a separate taxable period pursuant to section six hundred fifty-four,
and which period is contained within such period of five hundred forty-eight
consecutive days, 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 period of less than twelve months bears to five
hundred forty-eight, or

(B)

who is not domiciled in this state but maintains a permanent place of abode
in this state and spends in the aggregate more than one hundred eight-three
days of the taxable year in this state, unless such individual is in active
service in the armed forces of the United States.

-2­
TSB-A-90 (11) I
Income Tax
August 21, 1990
Section 102.2(b) of the Personal Income Tax Regulations (hereinafter Regulations) provides
that:
Any person domiciled in New York State is a resident for income tax purposes for
a specific taxable year, unless for that year he satisfies all three of the requirements
in paragraph (1) or all three requirements in paragraph (2) of this subdivision:
(1) For a specific taxable year all three of the following requirements are met:
(i) he maintains no permanent place of abode inside New York State
during such year;
(ii) he maintains a permanent place of abode outside this State during
such entire year; and
(iii) he spends in the aggregate not more than 30 days of the taxable year
in this State; or
(2) For a specific taxable year beginning after December 31, 1977, all three of the
following requirements are met:
(i) within any period of 548 consecutive days he is present in a foreign
country or countries for at least 450 days;
(ii) during such period of 548 consecutive days he is not present in New
York State for more than 90 days, 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 90 days; and
(iii) during any period of less than 12 months, which would be treated as
a separate taxable period pursuant to Part 148 of this Subchapter, and
which is contained within such period of 548 consecutive days, he is
present in New York State for a number of days which does not exceed
an amount which bears the same ratio to 90 as the number of days
contained in such period of less than 12 months bears to 548.
As long as an individual who is domiciled in New York State continues to meet the
requirements of either paragraph (1) or paragraph (2) of this subdivision, he will be
considered a nonresident of New York State for income tax purposes. However, if
for any taxable year he fails to meet those conditions, he will be subject to New York
State personal income tax as a resident for that year. Where an individual domiciled
in New York State claims to be a nonresident for any taxable year, the burden is upon
him to show that during that year he satisfied the requirements set forth in paragraph
(1) or paragraph (2) of this subdivision.
Example: B, a single individual, is domiciled New York State. During the
period July 1, 1978 through December 30, 1979 (a period of 548

-3­
TSB-A-90 (11) I
Income Tax
August 21, 1990
consecutive days), B was present in a foreign country 463 days.
During the above period, B was present in New York State a total of 50 days, 15 days
during the period July 1, 1978 through December 31, 1978, and 35 days during 1979.
Since B was present in a foreign country 463 days, he meets the requirements of
subparagraph (2)(i) of this subdivision.
B also meets the requirements of subparagraph (2) (ii) of this subdivision, because
the total of 50 days he was present in this State during this 548 consecutive day
period is less than the maximum of 90 days allowed.
To ascertain whether he meets the requirements of subparagraph (2)(iii) of this
subdivision, B must determine if the number of days present in New York State
during the period that is less than 12 months (July 1, 1978 through December 31,
1978) exceeds the maximum allowed for this less than 12-month period, the
maximum number of days B may be present in New York State during the period
July 1, 1978 through December 31, 1978 is 30, determined by making the following
computation:

184

(Number of days
in the less than
12-month period)
x 90 = 30

548

Maximum number of days
B may spend in New York
State during the period
July 1, 1978 through
December 31, 1978

Since B was present in New York State 15 days during the period July 1, 1978
through December 31, 1978, he did not exceed the maximum of 30 days allowed for
this period. Therefore, he meets the requirements of subparagraph (2) (iii) of this
subdivision.
Based on the information contained in this example, B meets all the requirements of
paragraph (2) of this subdivision and would be considered a nonresident of New
York State for income tax purposes during the period July 1, 1978 through December
30, 1979. B would be required to file as a resident of New York State for the period
January 1, 1978 through June 30, 1978 and as a nonresident of New York State for
the period July 1, 1978 through December 31, 1978. B would be required to file as
a nonresident of New York State for the entire taxable year of 1979.
A taxpayer may choose any period of 548 consecutive days. For example, herein, if
Petitioner's period of 548 consecutive days is May 2, 1990 through October 31, 1991, and Petitioner
spends at least 450 of those days in a foreign country and Petitioner is not present in New York State
for more than 90 days during such 548 day period, and of those 90 days Petitioner is not present in
New York State more than 50 days during the period January 1, 1991 through October 31, 1991 (see
computation below) and, if applicable, Petitioner does not maintain a permanent place of abode in
New York State at which Petitioner's wife or minor children are present more than 90 days,
Petitioner would be considered a part year nonresident of New York State for the period January 1,
1991 through October 31, 1991. For the period November 1, 1991 through December 31, 1991,

-4­
TSB-A-90 (11) I
Income Tax
August 21, 1990
Petitioner would be a resident of New York State. Thereafter, he will be considered a resident of
New York State unless he meets the requirements of section 102.2(b)(1) or (2) of the Regulations.
The following is the computation of the number of days allowed in New York State during
the period January 1, 1991 through October 31, 1991:
(1/1/91 - 10/31/91)

304 days
548 days

x 90 days = 50 days allowed
during 1991

However, if Petitioner's period of 548 consecutive days is from July 2, 1990 through
December 31, 1991, and Petitioner was a nonresident of New York State for the period January 1,
1990 through July 1, 1990, the period July 2, 1990 through December 31, 1990 would not be a
separate taxable period pursuant to Part 148 of the Regulations and the third requirement of the 548
day rule (section 102.2(b)(£)(iii) of the Regulations) would not apply. Therefore Petitioner would
be a nonresident for the entire year of 1991.
It should be noted that Petitioner cannot be present in New York State more than 90 days
during the entire 548 day period (July 2, 1990 - December 31, 1991.) If Petitioner meets the other
requirements, that is, if he spends 450 days of the 548 day period in a foreign country and, if
applicable, Petitioner does not maintain a permanent place of abode in New York State at which
Petitioner's wife or minor children are present more than 90 days, Petitioner will be considered a
nonresident for the period January 1, 1990 through December 31, 1991. Thereafter, he will be
considered a resident of New York State unless he meets the requirements of section 102.2(b)(1) or
(2) of the Regulations.
It should be further noted that days spent vacationing in Europe by Petitioner at the end of
his active duty commitment would be considered as days present in a foreign country for purposes
of the 548 day rule.
In any administrative proceeding the burden would be on the Petitioner to prove the number
of days he was present in a foreign country for the purposes of the 548 day rule. It would be up to
the trier of fact in the administrative proceeding to determine whether Petitioner has met his burden
of proof. Such factual questions cannot be decided in an advisory opinion. However hotel and motel
receipts, airline ticket receipts, and military orders would be the type of proof that would be relevant
at such a hearing.

-5­
TSB-A-90 (11) I
Income Tax
August 21, 1990
If Petitioner is required to file Form IT-203 Nonresident and Part Year Resident Income Tax
Return, Petitioner should submit a statement with such return explaining how Petitioner meets the
requirements of the 548 day rule (section 102.2(b)(2) of the Regulations).

DATED: August 21, 1990

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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