The Journal of The DuPage County Bar Association

Back Issues > Vol. 24 (2011-12)

Snowbirds, Reverse Snowbirds, and the Illinois Income Tax Act
By Neil Goltermann

The Illinois Income Tax Act says the tax applies to anyone who had the “privilege” of earning income as a resident of Illinois.[1] The Illinois Income Tax Act defines a resident as “an individual (i) who is in this State for other than a temporary or transitory purpose during the taxable year; or (ii) who is domiciled in this State but is absent from the State for a temporary or transitory purpose during the taxable year.”[2]

So when is a person not a resident of Illinois and therefore not subject to its income tax? The Illinois Income Tax Act simply says that a nonresident is someone who isn’t a resident![3] Where does this leave snowbirds and reverse snowbirds?[4] Fortunately we have administrative rules to fall back on. Or, do we?

Illinois Administrative Rules. Illinois presumes that anyone in the state for more than nine months is a resident.[5] Also, it is presumed anyone who is absent from the state for more than one year is a non-resident.[6] And, of course, these presumptions can be overcome depending on the circumstances![7] The analysis is subjective.

In 1999 the Department of Revenue issued a General Information Letterv(“GIL”)[8] in response to a request from a person who came to Chicago for the summers, but was in Florida the rest of the year. The facts make it sound like this person was a reverse snowbird. Once they retired they purchased a condominium in Florida, registered to vote in Florida and secured a Florida driver’s license. During the summers they would come back to Chicago and stay in a rented, furnished apartment. This person then apparently decided to purchase a condo in Chicago, prompting the inquiry to the Department.[9]

The GIL stated: “[I]ntent is a controlling factor in determining residency. Mere ownership of residential property alone does not create a residence nor does the absence of the property indicate a lack of residence. The process is highly subjective. However, bank accounts, driver licenses and voting privileges in particular help to indicate where one has established a residence. None of these factors are determinate of residency.”[10]

Let’s examine the common situation of a couple that have lived and worked in Illinois who have decided it’s time to enjoy the fruits of their labor by spending time in Florida. They start by going at different times of the year. However, when they go they spend a couple of weeks there. Then they start spending more time in Florida during the winter months. They purchase a townhome in Florida and don’t want to come back until they can be sure they will not encounter any snow in Illinois. Thus, they will be spending more and more time in Florida. Since Florida doesn’t have an income tax they start to wonder if they can avoid Illinois’s income tax (at whatever rate it permanently ends up being!). What do they do?

Illinois regulations make an attempt to address this situation. Example 3 of Section 100.3020(c)(3) of the Illinois Administrative Code provides us with the fact pattern of an apparent snowbird couple from Minnesota that are domiciled there and travel to Illinois for November into March. As the fact pattern is drafted, the conclusion is that the couple are in Illinois for “temporary or transitory purposes” because they belong to clubs in Minnesota, have no business interests in Illinois, very little social life in Illinois and no relatives in Illinois.[11] This example says the couple are Illinois residents if the fact pattern is reversed and the couple is domiciled here and visits Minnesota.

Considerations for Changing Residency. It is a major step to change one’s residency, even where recent history has shown a willingness to invest money to purchase a new home and stay longer and longer in the new location. Yet, often the economics of making this decision will have a strong influence on the final decision. There is nothing wrong with making decisions and taking actions that are expected to result in a lower tax liability. That is, there is no “public duty to pay more than the law demands, taxes are enforced exactions, not voluntary contributions.”[12]

The decision-making process will not be an easy one. Numerous variables need to be considered, especially if there are expected economic benefits. Keeping your existing Illinois home is a big decision. Changing permanent residence can have an effect on the capital gains exclusion on the eventual sale of the Illinois home.[13] Examining the tax ramifications is an important step to take.

Evidencing Change of Residency. There are positive steps our Illinois snowbird couple can take to effectively make sure they accomplish a change of residency. While it may affect the analysis, they can make this change even if they want to keep an Illinois residence for their forays back north.

Whether or not a person owns residential property in Florida, they can manifest their intent to make Florida their primary residence by recording a signed statement that they live in Florida.[14] Therefore, one of the first steps to take is to prepare and record a document titled “Declaration of Domicile.” This document is commonly available at county offices and on the Internet.[15]

Concurrent with getting the Declaration of Domicile recorded further manifestation of the change of residence should be implemented by filing for the Florida homestead exemption, securing a Florida driver’s license, registering all vehicles in Florida and registering to vote. At the same time, our snowbirds should be taking steps back in Illinois, including, sending a letter to the local township assessor and county assessor advising of move to Florida and letting these officials know your Illinois residence is no longer qualified for the Illinois homestead exemption. Further, write a letter to the local election commission and request to be taken off the voter registration rolls due to your move and registration to vote in Florida.

There are numerous other practical steps that are indicative of a true change in residency: (1) Open a Florida bank account, (2) Transfer contents of the Illinois safe deposit box to a Florida safe deposit box, (3) Change credit cards to Florida address, (4) Establish relationships with doctors and dentists, and use them, (5) Establish a relationship with pharmacy providers, (6) Transfer all mail to Florida address; notify all subscriptions, etc., of address change, (7) Establish all investment accounts with local branches of national companies; change address for all such accounts, (8) Change address on passports, (9) Change address, as applicable, for all insurance policies, (10) Change address with all mailings, including alumni associations, religious organizations, clubs, etc. Send a letter to all such organizations, (11) Join a social club in Florida and attend regularly, especially during the first year, (12) Find and support local Florida charitable causes, (13) Seek the advice of Florida professionals such as CPA, financial planner and attorney.  Furthermore a Florida attorney should draft and execute Florida’s Health Care Surrogate Designation, a Florida living will and power of attorney, along with review and changes to any will and trust.

Additional steps that can be taken which may naturally have deep-seated personal issues involved include: (1 ) Schedule family holiday events, gatherings and social activities for the new home in Florida, rather than Illinois; (2) Transfer works of art, expensive furniture and heirlooms to Florida, where you may still want to leave these in an Illinois residence; (3) Establish relationships with a place of worship/religious organization(s) in Florida; (4) Decide if it makes sense to resign from a golf club or change the membership status to non-resident; (5) Review memberships in other organizations and determine if it makes sense to continue membership; (6) Maintain a “business” office in Florida, even if in the house, from which to do any ongoing business; (7) No one factor discussed or listed above, taken alone, is going to be determinative whether or not you have forsaken the privilege of earning income in the Land of Lincoln.[16] Yet, actions speak louder than words. The more steps outlined above which are taken as part of a change of residency, the more convincing the argument in support of the change.

Keep Records. It is important to maintain and keep records of the change in residency. Keep a log of all the communications, including telephone calls and emails, related to the move. Our snowbirds will be able to identify when notifications occurred as well as public employees who had notice, took information or made statements regarding the move. Maintain a log of all traveling. This will assist in determining not only how much time the snowbirds spent in the new home, but away from Illinois. Even though it takes a full year of being absent from Illinois to raise the presumption that you no longer reside here, it doesn’t mean you cannot assert the fact that you are no longer a resident.[17]

Further, when preparing the move or down-sizing, whenever an Illinois residence is kept for the return visits and reverse snowbird stays, resist the temptation to throw away records related to the maintenance of the home. This includes recent utility invoices, telephone bills, etc. These records can show a decreasing level of use of the Illinois home as you spend more time in Illinois, as well as provide a comparison level after the move. This can be particularly relevant for electricity and gas usage and origination of telephone calls (at least from land lines). Keep copies of all correspondence, notices, cancellations and applications related to the move. In addition, the Department of Revenue may ask for these types of records if it is reviewing a taxpayer’s place of residence.[18]

Illinois Tax Filings. These records may be needed for the continued filing of Illinois income tax returns. If you continue to receive Illinois income an Illinois 1040 tax return will be required. The rules provide information about the filing of an Illinois income tax return.

Where a person is presumed to be an Illinois resident,[19] but doesn’t have any Illinois income,[20] she may need to file an Illinois tax return. This return will not require a Schedule NR, should include the computation of net income as if a resident, instead of entering the tax liability make the notation ‘No liability – nonresident.’[21] The tax return should also include a “signed statement indicating which presumption of residence the individual was subject to and setting forth in detail the reasons why the individual believes she was a nonresident for the taxable year” and further “evidence such as certificates or affidavits that the individual is able to obtain showing that he was a nonresident for the taxable year.[22]

A person who thinks she is a nonresident, but under the rules is presumed to be a resident,[23] and has Illinois income must also file an Illinois income tax return for the applicable year.[24] This return will require a Schedule NR and should also include the signed statement showing why she is a nonresident and provide supporting certificates, affidavits and information.[25]

Conclusion. The snowbirds shouldn’t just fall into a decision to change their residence to Florida or other warm clime of their choice. In addition, if they find themselves spending more and more time in their snowbird state they should review whether or not they can fairly claim that they are no longer Illinois residents. There may be some very real advantages. For example, the State of Florida does not have any estate tax. And one more thing, after making the change of permanent residency, don’t spend 9 months or more of time in a given year back in Illinois!

[1] 35 Ill. Comp. Stat. 5/201(a) (2010).

[2] 35 Ill. Comp. Stat. 5/1501(20)(A).

[3] 35 Ill. Comp. Stat. 5/1501(14).

[4] The former spend winters in a warm clime, like Florida. The latter do the opposite and spend their winters in Illinois.

[5] 86 Ill Adm Code 100.3020(f).

[6] 86 Ill Adm Code 100.3020(f).

[7] 86 Ill Adm Code 100.3020(f).

[8] GILs are issued by the Department of Revenue in response to inquiries from taxpayers, representatives, etc. They are not statements of policy, binding statements, and cannot be used to take a position on a tax issue. See  86 Ill Adm Code 1200.120(a), (b) and (c).

[9] IT 99-0097-GIL, 1999 WL 1489796.

[10] IT 99-0097-GIL, 1999 WL 1489796.

[11] 86 Ill Adm Code 100.3020(c)(3).

[12] Judge Learned Hand expressed this sentiment in his dissenting opinion in Commissioner v. Newman, 159 F.2d 848, 850-51 (2d Cir.1947). Judge Hand also wrote that “[a]ny one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.” Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934) (L. Hand, J.), aff'd, 293 U.S. 465, 55 S.Ct. 266, 79 L.E. 596 (1935).

[13] 26 USCA §121(a)  provides “Gross Income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence for periods aggregating 2 years or more.” See also IRS Publication 523 (2010), at

[14] See, Fla Stat Ann § 222.17(2) (West), which provides “Any person who shall have established a domicile in the State of Florida, but who shall maintain another place or places of abode in some other state or states, may manifest and evidence his or her domicile in this state by filing in the office of the clerk of the circuit court for the county in which he or she resides, a sworn statement that his or her place of abode in Florida constitutes his or her predominant and principal home, and that he or she intends to continue it permanently as such.”

[15] See, e.g., Declaration of Domicile, at (last accessed, Jan. 8, 2012).

[16] 35 Ill. Comp. Stat. 5/201(a).

[17] This is only a presumption, one that can be overcome with appropriate evidence when called into question. 86 Ill Adm Code 100.3020(f).

[18] The Department may request any relevant evidence which may assist it in determining the taxpayer's place of residence. 86 Ill Adm Code 100.3020(g)(1).

[19] A person hasn’t been absent from the state for more than one year…yet. 86 Ill Adm Code 100.3020(f).

[20] See, 35 Ill. Comp. Stat. 5/302, 303, 304.

[21] 86 Ill Adm Code 100.3020(g)(2).

[22] 86 Ill Adm Code 100.3020(g)(2).

[23] 86 Ill Adm Code 100.3020(f).

[24] 86 Ill Adm Code 100.3020(g)(3).

[25] 86 Ill Adm Code 100.3020(g)(3).

Neil Goltermann is an attorney with Momkus McCluskey, LLC in Lisle, Illinois. He concentrates his practice in estate planning, trust administration and probate. Neil is currently serving as chair of the Tax Law Committee and has previously served as chair of the Estate and Probate Law Committee. Neil earned his B.A. from DePauw University in 1977 and his J.D. from DePaul University College of Law in 1980.

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