President Trump isn't the only rich guy out there trying to slash his state and local tax bill by declaring a change of residency from New York to Florida. Thousands of other wealthy New Yorkers have tried this move, too. After all, Florida has some of the lowest taxes in the country, while New York has some of the highest.
We'll see how this plan works out for the president once he leaves office. The New York Department of Taxation and Finance has a well-earned reputation for fighting wealthy part-time residents who don't want to pay New York taxes anymore, so it isn't clear yet whether the change of residency will stick for state tax purposes. But if Trump can show a true change of domicile from New York to Florida, the president can save a ton on taxes in the following two ways.
State Income Taxes Will Go Down Significantly
When it comes to state income taxes, state residents typically pay tax on all their income, regardless of where they earned it. On the other hand, nonresidents only pay tax on income generated within the state. That's the key to the state income tax savings President Trump stands to reap.
Florida has no state income tax. New York has one of the highest income taxes in the country, with a top rate of 8.82%. As a New York resident, the president would pay New York taxes on all his income. As a Florida resident, he would only pay New York taxes on income coming from New York. In either case, there would be no Florida income taxes to pay. While the president's New York-sourced income may be significant, as a Florida resident he would completely avoid state tax on all income from all other sources, which is presumably a huge tax savings.
Sponsored Content
State Death Taxes Will Be Avoided
President Trump's family is probably thrilled to have the president take up residency in Florida. If the president qualifies as a resident of the Sunshine State, there would be no state-level estate or inheritance taxes to pay when he passes away.
On the other hand, New York not only imposes an estate tax, it has an unusual "cliff" provision that would probably subject the entire Trump estate to the tax. Generally, the New York estate tax is only imposed on that portion of an estate over the exemption amount for the year of death ($5.74 million for 2019). However, if the value of the estate is more than 105% of the exemption amount, the exemption isn't available and the entire estate is taxed. Presumably, the president's estate will be greater than the exemption amount for the year he dies, so the cliff provision would take effect.
Sponsored Content
-
Trump Admin. Kills Support for NYC Congestion Pricing Despite BenefitsState Policy The toll program enacted in January charges commuters $9 if they enter Manhattan’s lower district during peak hours.
-
Stock Market Today: Trump Tariff Threats Keep Pressure on StocksThe president warned of 25% tariffs being levied on automobiles, semiconductor chips and pharmaceutical imports.
-
New Colorado Tax Credit: What’s the Scoop?State Tax Everything you need to know about the Colorado family affordability tax credit in 2025.
-
Key Family Tax Breaks Are on the GOP Chopping Block This YearTax Credits Several tax breaks, including the Child Tax Credit, may face reforms or be cut entirely as lawmakers seek revenue for Trump’s tax plans.
-
What's Going on With New Jersey Property Tax Programs?Property Tax ANCHOR and ‘Senior Freeze’ just got a refresh, and there’s a new program: Stay NJ. Learn how to save on New Jersey property taxes.
-
Five States With the Largest EITC ChecksEITC Households in these states received a larger Earned Income Tax Credit (EITC) last year.
-
Downsize in Retirement With 2025 Tax Benefits: Three Key StrategiesRetirement Taxes Downsizing retirees may benefit from tax savings, lower utility bills, and freed-up income. But could a new presidency impact your home sale?
-
Gov. Hochul Vows to Deliver $1 Billion in Tax Relief to New YorkersState Tax The proposed tax cuts would benefit New York middle-class families.
-
Maryland Property Tax Assessment: What It Means for YouState Tax Amid a growing deficit, Maryland property values are rising. Here’s more of what to know.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
