An individual is "domiciled" in this state if the
individual intends to permanently or indefinitely reside in Iowa and intends to
return to Iowa whenever the individual may be absent from this state.
Individuals who have moved into this state are domiciled in Iowa if the
following three elements exist:
(3) a bona fide
intention to change domicile and to remain in this state permanently or
indefinitely.
Julson v. Julson, 255 Iowa 301, 122 N.W.2d 329,
331 (1963).
Every person has one and only one domicile. Domicile, for
purposes of determining when an individual is "domiciled in this state," is
largely a matter of intention which must be freely and voluntarily exercised.
The intention to change one's domicile must be present and fixed and not
dependent upon the happening of some future or contingent event. Because it is
essentially a matter of intent, precedents are of slight assistance and the
determination of the place of domicile depends upon all the facts and
circumstances in each case.
Once an individual is domiciled in Iowa, that status is
retained until such time as the individual takes positive action to become
domiciled in another state or country, relinquishes the rights and privileges
of residency in Iowa, and meets the criteria set forth from Julson v.
Julson, 255 Iowa 301, 122 N.W.2d, 329, 331 (1963). The director may
require an individual claiming domicile outside the state of Iowa to provide
documentation supporting establishment of another domicile. Absence from the
state for 183 days of the tax year or for any other extended period of time
does not alone show abandonment of an Iowa domicile.
a. There is a rebuttable presumption that an
individual is domiciled in Iowa if the individual meets the following factors:
(1) Maintains a residence or place of abode
in Iowa, whether owned, rented, or occupied, even if the individual is in Iowa
less than 183 days of the tax year, and either
(2) Claims a homestead credit or military tax
exemption on a home in Iowa, or
(3)
Is registered to vote in Iowa, or
(4) Maintains an Iowa driver's license,
or
(5) Does not reside in an abode
in any other state for more days of the tax year than the individual resides in
Iowa.
b. There is a
rebuttable presumption that an individual is not domiciled in Iowa if the
individual meets all of the following factors:
(1) Does not claim a homestead credit or
military exemption on a home in Iowa,
(2) Is not registered to vote in
Iowa,
(3) Does not maintain an Iowa
driver's license,
(4) Is in Iowa
less than 183 days of the tax year; and
(5) The individual maintains a place of abode
outside of Iowa where the individual resides for at least 183 days of the tax
year.
c. In addition to
the factors listed for the above rebuttable presumptions for "permanent place
of abode" or "domicile," some of the nonexclusive factors to consider in
determining whether an individual is a resident of Iowa are as follows:
(1) Maintains a place of abode in Iowa,
whether owned, rented, or occupied.
(2) Maintains an Iowa driver's
license.
(3) Maintains active
membership in an Iowa church, club, or professional organization and
participates as a result of such membership.
(4) Documents, such as tax forms, legal
documents, and correspondence, initiated during tax periods, use an Iowa
address. Legal documents could include wills, deeds, or other
contracts.
(5) Immediate family
members residing in Iowa who are claimed as dependents or rely, in whole or in
part, on the taxpayer for their support.
(6) Vehicles registered in Iowa.
(7) Location of employment or active
participation in a business within Iowa.
(8) Active checking or savings accounts or
use of safe deposit boxes located in Iowa.
(9) Claims a benefit on the federal income
tax return based upon an Iowa home being the principal place of residence.
Examples include mortgage interest on principal residence and travel expenses
while away from the principal place of residence.
(10) Receives a number of services in Iowa
from doctors, dentists, attorneys, CPAs or other professionals.
Unless shown to the contrary, married persons are presumed to
have the same residence. Ordinarily, the residence of a minor is that of the
person who has permanent custody over the minor.
An individual may qualify as a part-year resident of Iowa
by:
(1) not maintaining a permanent
place of abode; and
(2) not having a
domicile in Iowa for the entire tax year. In determining part-year resident
status, whether an individual is in or out of Iowa for 183 days may not be a
factor.
(3)
Resident
determination for individuals on active duty military service. The
Soldiers and Sailors Civil Relief Act provides in
50 U.S.C. Appx ยง 574(1)
that members of the armed forces of the United States shall not be deemed to
have lost a residence or domicile in any state, solely by being absent from
that state in compliance with military or naval orders, or to have acquired a
residence or domicile in another state while being absent from the state of
residence. Thus, residents of Iowa who enter military service will retain their
Iowa residence during the tenure of their military service or until they take
positive action to change their state of residence.
For tax years beginning prior to January 1, 2011, residents
of Iowa in military service will have Iowa income tax withheld from their
military pay except when the military pay is earned in a combat zone and is
totally or partially exempt from both federal and state income tax. An Iowa
resident in military service can change state of residence for purposes of
withholding of state income tax by completing Form DD2058 and designating a
state other than Iowa as the individual's new state of residence. The military
payroll officer of the service person will accept the DD2058 form and stop
withholding Iowa income tax from the service person's military pay and start
withholding the state income tax of the state of new residence of the service
person (assuming the new state of residence has an income tax and assuming the
new state of residence requires withholding of income tax from wage payments to
its residents in military service). However, the completion of the DD2058 form
by the "former Iowa resident" will not be considered as a valid change of
residence for Iowa income tax purposes unless the service person was physically
residing in the new state of residence at the time the DD2058 form was
completed and the service person took other actions to show intent to change
state of residence. Other actions to show intent to change state of residence
would include:
(1) registering to vote
in the new state;
(2) purchasing
real property in the new state;
(3)
titling and registering vehicles in the new state;
(4) notifying the state of previous residence
of the state of residence change;
(5) preparing a new last will and testament
which indicates the new residence; and
(6) complying with the tax laws of the state
of new residence. For tax years beginning on or after January 1, 2011, see rule
701-302.76 (422) regarding the
exemption of active duty pay for both resident and nonresident members of the
armed forces, armed forces military reserve, or the national guard.
Military personnel who are residents of other states and who
come to Iowa as a result of military or naval orders, but who later decide to
become legal or actual residents of Iowa, or military personnel who purchase
residential property in Iowa and claim homestead credits or the military
exemption for the property for property tax purposes are presumed to be
residents of Iowa for income tax purposes.
Military personnel who are not residents of the state of Iowa
and who receive military pay for service in Iowa shall not be considered to
have received this income for services performed within Iowa or from sources
within Iowa. These nonresidents of Iowa will be taxable on nonmilitary wages
for personal services in Iowa they receive while stationed in Iowa. These
individuals will also be taxable to Iowa on incomes they receive from
businesses, trades, professions, or occupations operated in Iowa during the
time they are stationed in Iowa as well as on nonmilitary incomes from any
other sources within Iowa.
Since military nonresidents of Iowa cannot be taxed on their
military pay while they are stationed in Iowa, the military pay cannot be
considered for purposes of Iowa's taxation of nonresidents in accordance with
the Servicemembers Civil Relief Act,
Public Law
108-189. The military pay of the nonresident of
Iowa must be excluded from the computation of the nonresident credit set forth
in rule 701-304.5 (422). This exclusion
from the computation of the nonresident credit applies to military pay of
nonresident servicemembers who are in an active duty status as defined under
Title 10 of the United States Code.
For tax years beginning before January 1, 2009, spouses of
military personnel who earn wages and other incomes from Iowa sources are taxed
on these incomes similarly to other nonresidents of Iowa. Spouses of Iowa
resident military personnel who were nonresidents of Iowa at the time of the
marriages with the Iowa residents will not be considered to be residents of
Iowa until they actually reside in Iowa with their husbands or wives. For tax
years beginning on or after January 1, 2009, spouses who earn wages from Iowa
sources are not subject to Iowa income tax on these wages if one spouse who is
present in Iowa is a member of the armed forces, the other spouse is present in
Iowa solely to be with the military spouse, and the spouse who is a member of
the armed forces maintains a domicile in another state. This treatment for tax
years beginning on or after January 1, 2009, is required by the Military
Spouses Residency Relief Act, Public Law No. 111
-97.
(4)
Examples of resident determination.
a. Fred and Mary were domiciled in Iowa when
Fred retired in 1994. They have a house in Iowa and a condominium in Florida.
Prior to 1994, Fred and Mary spent approximately four months in Florida and the
remaining eight months in Iowa. Fred owned a small business when he retired and
was retained as a consultant and remained a member of the board of directors
after retirement. Fred and Mary have friends and family in both Iowa and
Florida. They are also involved in the activities of the local country club as
well as other civic and service organizations in both locations. When Fred
retired, he and Mary decided to spend more time in Florida, especially during
the winter months. They usually leave for Florida in late October and return to
Iowa in early April. They have transferred their automobile registrations to
Florida and they have acquired Florida driver's licenses. They have registered
to vote in Florida and have voted in Florida elections. They visit doctors and
dentists in both locations as the need arises. They maintain bank accounts in
both locations and have mail sent to the location at which they are physically
residing. Fred and Mary usually return to Iowa for the Thanksgiving and
Christmas holidays and Fred returns once a month to attend board meetings. They
do not claim a homestead credit or military tax exemption on their Iowa home,
but they do use their Iowa address on most of their legal documents and on
their federal tax return. They also travel and vacation during the winter
months and oftentimes leave Florida to vacation.
Fred and Mary would be considered Iowa residents because they
have retained a permanent abode in Iowa.
b. Susan takes an apartment in Des Moines
when her
employer assigns her to the region office of a large accounting firm
for a temporary period. She spends more than 183 days in Iowa, but she returns
to her apartment in Ohio once a month to visit her friends and to check her
mail. She intends to return to Ohio when her assignment in Des Moines is
terminated. She has retained her Ohio driver's license and she is registered to
vote in Ohio.
Susan would not be considered to be an Iowa resident because
she has not established a "permanent" place of abode in Iowa, even though she
is present in Iowa for more than 183 days. Also, she has not had a definite
abandonment of her former domicile. Susan would be taxed on her Iowa income as
a nonresident. However, if Susan was assigned to Des Moines on a permanent
basis, she may be considered an Iowa resident even though she retains her
apartment in Ohio.
c. John
is an over-the-road truck driver and his job takes him out of Iowa for
approximately 240 days a year. He is married and his wife, Mary, lives in
Marshalltown, Iowa. His two school-age children attend school in that community
and Mary also has a part-time job as a nurse for the neighborhood clinic. John
gets home for most weekends and for the holidays. He is registered to vote in
Iowa and utilizes the Iowa homestead and military tax exemptions. He does not
own any other real property except a lakeside cabin in Minnesota, where the
family vacations during the summer.
John would be considered an Iowa resident even though he is
not present in the state for more than 183 days because John intends to return
to Iowa whenever he is absent and has not taken any steps to establish
residency in any other state.
d. Wilber, who is a resident of Idaho, has a
heart attack while vacationing in Iowa. He is hospitalized in the University
Hospitals in Iowa City. While there, the doctors also discover that he has a
rare blood disorder and Wilber is confined to the hospital for nearly nine
months, during which time he receives treatment.
Wilber's presence in Iowa is for a medical emergency. When an
individual suffers a medical emergency while present in this state for other
purposes and cannot be realistically moved from the state or in situations
where an individual is confined to an institution as a result of seeking
treatment, the time spent in Iowa would not count toward the 183-day rule.
Also, Wilber's hospital room would not be considered a permanent place of
abode.
e. Chuck and Linda
both worked for a major manufacturing company in Iowa and both of them decided
to take advantage of an early retirement package offered by their
employer.
They do not have any children, but Chuck has a brother who lives in Davenport,
Iowa, and Linda has a sister who lives in Phoenix, Arizona. After retirement,
Chuck and Linda sell their house and purchase a motor home. They spend their
time traveling the United States and Canada. They do not have a place of abode
in any state as they live in their new vehicle. They do not spend more than 183
days in any state during the year. They retained their Iowa driver's licenses
and their motor home is registered in Iowa. They also have bank accounts in
both Iowa and Arizona, and they have their mail sent to Chuck's brother as well
as Linda's sister. They show Iowa as their state of residence for federal
income tax purposes. They are not registered to vote in any state.
Chuck and Linda would be considered residents of Iowa. They
have not shown an intention to change domicile and remain in another state
permanently or indefinitely.
