Benefits of Becoming a Florida Resident

When considering a move to Florida, it is important to understand the benefits of doing so.  Besides the year-round pleasant weather, there are two primary benefits.  The first is that Florida has no state income tax, while Ohio does.  Ohio imposes income tax on income of every resident of Ohio. The highest tax rate is currently 4.797%.  Non-residents of Ohio are also subject to Ohio income tax on Ohio source income – generally income earned in Ohio. The second benefit of being a Florida resident is that Florida’s homestead exemption is viewed as one of the strongest in the country.  Why is this important?  It is important because this exemption protects the home of a Florida resident who has lived in Florida for forty months or more – regardless of the home’s value – from a forced sale to satisfy his or her creditors.  Florida’s exemption amount for someone who has not lived in Florida for forty or more month’s is $160,375.  Ohio’s exemption amount is $145,425.

If you decide to make the move to Florida, it is important to understand the requirements necessary to establish the fact that you are no longer an Ohio resident.  Ohio recently changed its rules regarding this subject.  Ohio provides a “bright line” test to determine if you a non-resident.  This bright line test says that if you meet the following six requirements for a calendar year, you are presumed not to be an Ohio resident:

1. You owned at least one residence in another state for the entire year and you did not claim a depreciation deduction for that residence;
2. You have no more than 212 contact periods in Ohio. You are considered to have one contact period in Ohio if you are away overnight from your non-Ohio residence and while away overnight from that residence you spend at least some portion, however minimal, of each of two consecutive days in Ohio;
3. You do not have an Ohio driver’s license or other Ohio ID for the entire year;
4. You do not claim an Ohio homestead property tax exemption;
5. You do not receive in-state tuition for any Ohio college for the year; and
6. You file Form IT-NRS with Ohio Department of Taxation no later than October 15 of the year following the year you are claiming non-residency status.

If you are thinking about moving to Florida, it makes sense to establish residency there as soon as possible to avoid Ohio income tax.  Please contact us if we can be of assistance.