State Taxes After Moving Abroad: Why Some States Keep Taxing You

Key takeaways

• California, Virginia, New Mexico and South Carolina can all tax a person who lives abroad if the person is still domiciled there, and residents are taxed on income from everywhere.
• A domicile lasts until a new one is acquired, so leaving the country or the state is not enough; California requires abandoning the old home, moving to the new one, and intending to stay.
• California has a written 546-day safe harbor for people abroad under an employment-related contract, with exceptions; the sources found no equivalent in the other three.
• California allows neither the foreign earned income exclusion nor a foreign tax credit, so income relieved on the federal return can still be taxed there.
• The sources do not show that these four states are harder to leave than others; they show that each weighs facts such as license, voter registration, home and family.

Leaving the country does not end state residency; leaving the state's domicile does

A state tax return depends on state law, not on the federal exclusion or credit. A state can treat a person as a resident while the person lives abroad if the person is still domiciled there. Resident status then brings tax on all income, wherever earned.

The four states named in this guide all use domicile as a core test. The sources below show how each one words it.

• California. A resident is a person present in California for other than a temporary or transitory purpose, or domiciled in California but outside it for a temporary or transitory purpose (FTB residency page, updated July 7, 2026). FTB Publication 1031 (2025) adds: "Residents of California are taxed on ALL income, including income from sources outside California."
• Virginia. Va. Code §58.1-302 counts as a resident "every person domiciled in Virginia at any time during the taxable year" and anyone who keeps a place of abode in Virginia for more than 183 days of the year, whether domiciled there or not. The Tax Commissioner has ruled that Virginia's authority to tax the foreign-source income of its residents is not prohibited (Ruling 09-50, April 27, 2009).
• New Mexico. Under 3.3.1.9(A) NMAC, a full-year resident is an individual domiciled in the state for all of the taxable year, or one physically present for 185 days or more, regardless of domicile.
• South Carolina. Under Code §12-6-30(2), a resident individual is "an individual domiciled in this State."

A state does not need a day count to tax a person abroad. Domicile alone can be enough in all four.

A caution on the premise. This guide was asked to cover four states said to be especially hard to leave. The sources read here show that all four tax domiciliaries, which many states do. They do not show that these four are harder than others, and states such as New York, which have their own statutory tests, are not covered. (Any ranking of states by difficulty is not supported by the sources reviewed.)

How states decide where you are domiciled

Every state source read here follows the same logic: a person has one domicile, keeps it until a new one is acquired, and the state weighs facts, not statements.

• One domicile at a time, kept until replaced. FTB Publication 1031 (2025): "You can have only one domicile at a time" and "Once you acquire a domicile, you retain that domicile until you acquire another." South Carolina's domicile guide (June 2021) says the same: a person who leaves without intending to return keeps South Carolina domicile until a new one is established. New Mexico's regulation says domicile "does not change" until the person moves somewhere with a bona fide intent to make it a permanent home.
• Three elements for a change. California requires abandonment of the prior domicile, physically moving to and residing in the new place, and intent to remain there permanently or indefinitely, shown by actions (Pub 1031).
• The taxpayer carries the burden. Virginia Ruling 23-123 (October 26, 2023): "The burden of proving that the domicile has been changed lies with the person alleging the change," and a simple declaration is not enough.
• Intent must be unqualified. South Carolina says the intent to change must not depend on a future event, such as finding a permanent job.
• Facts weighed. California lists 15 factors, among them time spent in and out of the state, location of spouse and children, principal residence, driver's license, vehicle registration, voter registration, bank accounts, professional licenses, doctors, social ties, real property and investments. New Mexico's regulation lists a similar set and says easy-to-change items such as the driver's license, voter registration and address may receive less weight. South Carolina groups its factors into property, employment and finances, licenses, family and affiliations.

California adds that "it is the strength of your ties, not just the number of ties, that determines your residency."

A state ruling is not a rule for you. Rulings such as Virginia's 23-123 turn on that person's facts. They show how an agency reasons, not what it will decide for another taxpayer.

California: the 546-day safe harbor, and what it does not cover

California is the one of the four with a written safe harbor for people who work abroad. FTB Publication 1031 (2025) says an individual domiciled in California who is outside the state "under an employment-related contract" for an uninterrupted period of at least 546 consecutive days "will be considered a nonresident" unless one of these applies:

• The individual has intangible income exceeding $200,000 in any taxable year during which the employment-related contract is in effect.
• The principal purpose of the absence from California is to avoid personal income tax.

The spouse or registered domestic partner who accompanies the individual for at least 546 consecutive days is also treated as a nonresident. Return visits to California that do not exceed 45 days in total in a taxable year covered by the contract are considered temporary.

What this means in practice.

• The safe harbor is tied to an employment-related contract. The sources read do not say whether it covers a retiree, a person living on investments, or a self-employed person without a contract. (The scope of "employment-related contract" and the definition of "intangible income" are not addressed in full by the sources reviewed.)
• A person outside the safe harbor is judged by the closeness-of-connections test described above.
• A person treated as a nonresident is taxed only on income from California sources, and the publication says that includes pay for services performed in California.

No federal relief at the state level. Pub 1031 (2025) says: "California does not allow a foreign tax credit or a foreign earned income exclusion." The Schedule CA (540) instructions (2025) add that California does not allow a deduction for foreign income taxes, and that it does not conform to the federal foreign earned income exclusion. A person who is still a California resident while abroad can therefore face California tax on income that the federal return excludes or credits. Publication 1031 also notes that a person living abroad may have a California filing requirement even without a federal one, if the person has California-source income.

In concrete terms, a California resident who excludes a $120,000 salary on the federal return still has to report that amount to California (Pub 1031, Schedule CA instructions).

Virginia, New Mexico and South Carolina: what the tax agencies say

Virginia

Virginia Tax Ruling 23-123 (October 26, 2023) is the closest example of how the state treats a person working abroad. A federal employee based in Virginia was then assigned to several foreign countries. He claimed to be a resident of another state. The Commissioner held that he stayed a Virginia domiciliary because he kept his Virginia driver's license and voter registration, had not established a new home elsewhere, and "merely stayed at a friend's residence" between assignments. The ruling says that renewing a Virginia driver's license is considered "a strong indicator of intent" to remain domiciled there, and that retaining Virginia connections "raises considerable doubt" about intent to abandon. The Department also pointed out that Va. Code §58.1-312 A allows assessment at any time in cases of nonfiling, which reached back to years the taxpayer had not filed.

Two other rulings matter to a person abroad. Ruling 09-50 (April 27, 2009) holds that Virginia may tax residents' foreign-source income, and Ruling 18-19 (March 9, 2018) confirms that the subtraction for foreign-source income was repealed for taxable years beginning on or after January 1, 2003. (How Virginia treats the federal foreign earned income exclusion; neither ruling addresses it. No written safe harbor for people working abroad was found in the sources read.)

New Mexico

New Mexico has two paths to full-year residency: being domiciled in the state, or being present for 185 days or more, regardless of domicile (3.3.1.9(A) NMAC). A person abroad is tested on the first. The regulation defines domicile as "the place where an individual has a true, fixed home," says each person has only one domicile at a time, and gives declarations of intent "due weight" but not conclusive weight when contradicted by conduct. Its factor list includes homes owned or rented, where time is spent, employment, family location, real property, financial accounts, the address on federal tax returns, voter registration and licenses. Easy-to-change factors such as the driver's license, voter registration and address may receive less weight (3.3.1.9(C)(5) NMAC). (The current text of NMSA §7-2-2, which could not be opened; no safe harbor for work abroad was found.)

South Carolina

South Carolina's definition is domicile only (Code §12-6-30(2)). The Department of Revenue's Domicile Guide (June 2021) says a person who leaves South Carolina without intending to return keeps South Carolina domicile until a new one is acquired, and gives an example of a person who moves abroad for work: he "is still considered to be domiciled in South Carolina unless he becomes a permanent resident" of the foreign country. It also says that a new domicile is acquired "by choosing a new domicile and actually residing there," and that the intent must be unqualified. (Whether the Department accepts any other US state as the new domicile for a person living abroad; the guide's example addresses only the foreign country.)

The four states side by side

All four tax a domiciliary who lives abroad. They differ in the day-count rule, the safe harbor, and what the sources say about federal relief.

State	Resident test (sources read)	Day-count rule	Written safe harbor for work abroad	Federal relief at state level
California	Domiciled, or present for other than a temporary or transitory purpose (FTB residency page; Pub 1031, 2025)	No fixed count; time spent is one of 15 factors	Yes: 546 consecutive days under an employment-related contract, with exceptions (Pub 1031)	No foreign tax credit, no foreign earned income exclusion, no deduction for foreign income taxes (Pub 1031; Schedule CA instructions, 2025)
Virginia	Domiciled at any time in the year (Va. Code §58.1-302)	Over 183 days with a Virginia abode, even if domiciled elsewhere	None found	Foreign-source income subtraction repealed from 2003 (Rulings 09-50, 18-19); treatment of the exclusion not confirmed
New Mexico	Domiciled all year, or present 185 days or more (3.3.1.9(A) NMAC)	185 days, regardless of domicile	None found	Not confirmed
South Carolina	Domiciled (Code §12-6-30(2))	None in the statute	None found	Not confirmed

What the table shows: California is the only one of the four where a written safe harbor was found, and the only one where the sources confirm that the federal exclusion and credit do not carry over. For the other three, the question of what happens to income excluded or credited on the federal return was not answered by the sources read.

What helps break domicile, and what the agencies say does not

The agencies do not publish a checklist that guarantees a result. Their own wording points to these steps and pitfalls.

Steps that match what the agencies weigh

1. Establish a new home, not only leave the old one. California requires moving to and residing in the new locality with intent to remain permanently or indefinitely. South Carolina requires "choosing a new domicile and actually residing there."
2. Move the easy-to-check ties. The factor lists name driver's license, vehicle registration, voter registration, bank accounts, professional licenses, doctors and club memberships. Virginia treats keeping a Virginia license as a strong indicator of intent to remain.
3. Mind the property and family. California and New Mexico both list where the spouse and children live and where real property is located. A home kept ready in the state, or family left behind, weighs against the move.
4. Keep records. The burden is on the taxpayer in Virginia (Ruling 23-123). Dated records of the move, the new abode and the cancelled old ties are the evidence.
5. File the right return. Part-year or nonresident returns are the way to report the change. (Each state's form and filing rules for a person who leaves for abroad are not covered by the sources reviewed.)

What does not work by itself

• A statement of intent. Virginia: "A simple declaration is not sufficient." New Mexico gives declarations "due weight" but not conclusive weight.
• Leaving without a destination. All three domicile sources say the old domicile continues until a new one is acquired.
• Intent tied to a future event. South Carolina says intent to change must be unqualified.
• Changing only the easy items. New Mexico says driver's license, voter registration and address may carry less weight.
• Moving mainly to avoid tax. California's safe harbor does not apply if the principal purpose of the absence is to avoid income tax.

Where a person abroad ends up. The South Carolina guide's example says a person working abroad stays domiciled in the state "unless he becomes a permanent resident" of the foreign country. California says the change requires intent to remain permanently or indefinitely. Whether a US citizen who intends to return to the United States someday, but to no particular state, can claim a foreign domicile is not answered by the sources read. (How each state treats that person is not confirmed by the sources reviewed.) Some people choose a new state as their domicile instead. That choice is a matter of fact and intent in that state, and it needs its own advice.

A worked example: two Californians who move abroad

Both people were domiciled in California and move to Lisbon on January 15, 2027. The facts are invented to show how the written rules apply. They are not a prediction of an FTB decision.

Fact	Person A	Person B
Reason for the move	Two-year employment contract with a Portuguese company	Retirement, no employment contract
Time outside California	730 consecutive days	730 consecutive days
Return visits to California	30 days in each year	30 days in each year
Intangible income	Under $200,000 a year	Under $200,000 a year
California ties kept	None	House left furnished, California driver's license, voter registration and bank accounts, adult children in California
Spouse	Moved with Person A	Moved with Person B

Person A. The facts fit the Pub 1031 safe harbor on its face: an uninterrupted absence of at least 546 consecutive days under an employment-related contract, visits within the 45-day limit, and intangible income at or below $200,000. The exceptions would still need to be checked, in particular the rule on principal purpose of the absence. Person A would be treated as a nonresident for the period, taxed in California only on California-source income. (How the FTB applies the safe harbor in an audit is not confirmed by the sources reviewed.)

Person B. No safe harbor was found for a retiree without an employment-related contract. The closeness-of-connections test applies. Of the 15 factors in Pub 1031, Person B keeps the principal residence, the license, the voter registration, the bank accounts and family in California, which are factors on the list. Time outside the state favors Person B, but the guide cannot say how the FTB would weigh the whole set. The risk is that California treats Person B as still domiciled there, taxing all income, with no federal exclusion or credit carried over.

The difference is in the facts, not the destination. Both live in the same country for the same length of time.

Mistakes Americans commonly make

1. Assuming leaving the country means leaving the state. In all four states a domiciliary is a resident, and the old domicile continues until a new one is acquired.
2. Keeping the easy ties. A driver's license, voter registration and bank accounts are named in the factor lists, and Virginia calls a Virginia license a strong indicator of intent.
3. Counting on a declaration. Virginia says a simple declaration is not sufficient.
4. Not filing. Virginia's Ruling 23-123 notes that assessment is allowed at any time in cases of nonfiling, and the taxpayer there faced several open years.
5. Assuming the federal exclusion or credit applies to the state. California says it allows neither a foreign tax credit nor a foreign earned income exclusion.
6. Relying on the California safe harbor without its conditions. It needs an employment-related contract of at least 546 consecutive days, and it fails if the principal purpose of the absence is to avoid tax or intangible income exceeds $200,000.
7. Leaving with a vague plan. South Carolina says the intent to change must not depend on a future event.
8. Forgetting state-source income after leaving. A nonresident can still owe tax on income from sources in the state, such as pay for work done there or rent from property there (California Pub 1031; Virginia Ruling 18-19).

Frequently asked questions

Can a state tax me if I live abroad and have no income from the state?

Yes, if you are still a resident under its law. California taxes residents on all income, including income from sources outside California (Pub 1031).

Is the 546-day California safe harbor available to retirees?

The publication ties it to an employment-related contract. The sources read do not say whether it applies to anyone else.

Does the federal foreign earned income exclusion reduce my state tax?

In California, no: the state allows neither the exclusion nor a foreign tax credit. For Virginia, New Mexico and South Carolina, the sources read did not answer.

Is changing my driver's license enough?

No. New Mexico says easy-to-change factors may receive less weight, and Virginia says a declaration is not sufficient.

What if I never file a state return?

In Virginia, assessment is allowed at any time for nonfiling (Ruling 23-123). Other states' limits were not researched.

Are these four states the hardest to leave?

The sources do not show that. They show that these states tax domiciliaries and weigh facts, as other states do.

When to hire a professional

Domicile is decided on facts, and the cost of being wrong is several years of state tax on worldwide income. Consider a CPA, enrolled agent or tax attorney who knows the state when:

• You leave a state with a detailed factor list, such as California, and keep property or family there.
• You hold a house or business in the old state. State-source income remains taxable to a nonresident.
• You want to claim a new domicile in another state, which needs its own facts and filings.
• A state sends a residency questionnaire or audit notice. Residency audits turn on documents and timelines.
• Years were never filed. Virginia says assessment is open for nonfiling.

For a simple case with a clear contract abroad and few ties, a preparer familiar with the state's nonresident return may be enough.

Sources

All pages opened October 8, 2026. Page dates are as shown on the page.

Source	URL	Used for	Page date
California FTB, Residency status	https://www.ftb.ca.gov/file/personal/residency-status/index.html	Resident definition	Jul 7, 2026
FTB Publication 1031 (2025)	https://www.ftb.ca.gov/forms/2025/2025-1031-publication.pdf	Domicile, 546-day safe harbor, factors, no foreign tax credit or exclusion	2025 edition
FTB, 2025 Instructions for Schedule CA (540)	https://www.ftb.ca.gov/forms/2025/2025-540-ca-instructions.html	No conformity to the exclusion, no deduction for foreign income taxes. Page partly read.	2025 edition
Code of Virginia §58.1-302	https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-302/	Definition of resident	Not shown
Virginia Tax, Ruling 23-123	https://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/23-123	Change of domicile, burden of proof, driver's license	Oct 26, 2023
Virginia Tax, Ruling 09-50	https://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/09-50	Taxing residents' foreign-source income	Apr 27, 2009
Virginia Tax, Ruling 18-19	https://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/18-19	Repeal of the foreign-source income subtraction	Mar 9, 2018
3.3.1 NMAC (New Mexico Administrative Code)	https://www.srca.nm.gov/parts/title03/03.003.0001.html	Resident, domicile, factors	Not shown
South Carolina Code §12-6-30	https://www.scstatehouse.gov/code/t12c006.php	Resident individual defined as domiciled	Not shown
SC Department of Revenue, Domicile Guide	https://dor.sc.gov/resources-site/lawandpolicy/Documents/Domicile%20Guide%202021.pdf	Domicile factors, moving abroad example	June 2021

A note on scope: this guide is general information, not tax or legal advice. Whether you are still domiciled in a state, and what that means for your return, depends on your own facts and on that state's law — the facts here illustrate the rules, they are not a prediction for your case. Get advice from a CPA or tax attorney familiar with the specific state before you file or stop filing a state return.