Clients and many taxpayers often wonder whether it might be beneficial in retirement or while still working to change their place of residency as a way to minimize their current and future state tax obligations, or as part of their long-term strategy to minimize estate taxes to a more tax-friendly state. While most states tax all or a portion of the income of their residents, certain states like Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax, and New Hampshire and Tennessee do not tax earned wages. These and other states may not have “state” estate and/or inheritance tax as well, making them very appealing for those looking to change their residency in the long-term.
The IRS and the Treasury department began issuing a second round of Economic Impact Payments last week as part of the Consolidated Appropriations Act. Most individuals making up to $75,000 per year will receive a direct payment of $600; married couples making up to $150,000 per year will receive $1,200; and eligible individuals with children will receive $600 for each qualifying child dependent. Dependents who are 17 and older are not eligible for the child payment.