US digital nomads still need a home state for tax purposes. Some states keep taxing people who leave without a clean break. This guide shows how states decide who is a resident and which states charge no tax on wages. You will also see how to set up a new home state in the right order.
How to choose and set up your home state
1. Learn the two tests states use
States use two main tests to decide who is a resident. A state can tax you if you fail either one, so both tests need attention.
- Domicile: Your domicile is the place you treat as your permanent home and plan to return to. California’s Franchise Tax Board allows only one domicile at a time.
- Changing domicile: You have to leave the old domicile and settle in a new one with the intent to stay. Intent alone is not enough, and the person claiming the change has to prove it, according to California’s Office of Tax Appeals.
- Statutory residency in New York: You count as a resident if you keep a permanent place to live in the state. You also need to spend more than 183 days there. A rented home can count.
- The nine-month presumption in California: California presumes you are a resident if you spend more than nine months of the year there. You can challenge the presumption with evidence.
- Federal tools: The Foreign Earned Income Exclusion does not carry over to all state returns. California does not recognize it, according to tax firms that work with Americans abroad. The foreign tax credit covers foreign income taxes only, so it does not offset state tax. The federal side is covered in our guide to filing US taxes while working abroad.
Passing the domicile test in your new state does not cancel the second test in your old one. A nomad who changes domicile but keeps an apartment and takes long visits in the old state can still be taxed there as a resident.
2. Check whether your current state holds on to former residents
Tax firms that work with Americans abroad say California, New York, Virginia, and Connecticut may keep treating people as residents after they leave.
- California: The state taxes residents on income from all sources. Publication 1031 from the Franchise Tax Board lists the factors. They include where your family lives, where your home is, and where your driver’s license and voter registration sit.
- New York: The tax department weighs five factors. They are your home, active business involvement, time spent in the state, valued belongings, and family. Tax advisers call the belongings factor items near and dear.
- Virginia: One tax firm reports that Virginia expects you to set up a new domicile elsewhere before it stops treating you as a resident.
If your current state is on this list, the order of the steps below matters more. If your state has no income tax, you may already have a home state and mainly need to keep clean records.
3. Compare the states with no tax on wages
Nine states charge no tax on wages for tax years 2025 and 2026. They are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Three of them are worth a closer look, because their driver’s license rules decide how easy a move is.
- South Dakota: The state’s Department of Public Safety offers a path for people who travel full time for work and use a mail forwarding service. You sign a notarized residency affidavit. You attach a receipt for one night at an in-state hotel, campground, or RV park, plus proof of your mailbox. The first license requires an in-person visit. The affidavit also asks whether you keep a residence in another state, and license records are used for jury selection.
- Florida: The state wants two proofs of a Florida residential address, and a P.O. box does not count. Florida also lets residents record a Declaration of Domicile with the county clerk under Florida Statutes section 222.17. A Florida law firm notes that a declaration without real life in the state does not establish domicile.
- Texas: The state asks for two printed documents with your name and Texas residential address. Mail with a forwarding label and P.O. boxes are not accepted. First-time applicants need 30 days of residence before applying. The Department of Public Safety waives the 30 days for people who surrender a valid license from another state.
- Washington: The state has no tax on wages. Washington does charge a capital gains tax of 7% above an annual deduction and 9.9% above $1 million. A law blog that tracks the state’s published amounts puts the 2025 deduction at $278,000, while some sites list $262,000. Check the Washington Department of Revenue for the current figure. The same blog reports that Washington has passed a tax on very high incomes that is set to start in 2028.
- Other options: Alaska, Nevada, Tennessee, and Wyoming also have no tax on wages. New Hampshire ended its interest and dividends tax for tax periods starting on January 1, 2025.
States with no tax on wages still raise money through sales, property, and business taxes. The total burden varies. Florida’s state sales tax, for example, is 6%.
4. Match the state to your situation
Your living arrangements decide which state is realistic. Florida and Texas ask for a physical address, while South Dakota offers an exception for people without one.
- No US home or base: South Dakota is the state with a written process for people who travel full time. A mailbox from one of the mail forwarding services for nomads is part of that process.
- A relative or friend with a home in Florida or Texas: Florida’s licensing agency lets you use the host’s documents. You also submit a Certification of Address form. A rented room in a city such as Austin or Miami can also supply a lease and utility bill.
- A home you want to keep in a high-tax state: Your domicile is unlikely to move. Reviewers in California and New York treat a home that stays available to you as evidence of residency.
Whichever route you choose, the state expects you to live there at times. A recorded declaration or a mailbox alone does not establish domicile.
5. Build the paper trail in the new state
A tax firm that handles residency audits advises creating records in real time as the move happens. Each item below adds one more fact in favor of the new state.
- Driver’s license: Get a license from the new state and give up the old one. Florida states that its license cancels any license from another state.
- Voter registration: Register in the new state and cancel the old registration. South Dakota requires 30 consecutive days in one permanent dwelling to vote, according to a recent state law. A one-night stay supports a license but not a ballot.
- Mailing address: Move bank, card, and IRS mail to the new address. Tax advisers list bank statements and the address on your federal return among the records auditors review. Our guide to proof of address with no fixed home covers the documents banks and agencies ask for.
- Old-state benefits: Cancel the old vehicle registration and any homestead exemption.
- Professional licenses: California reviewers have treated a California professional license as a tie to the state, so it is worth checking where yours is held.
6. Cut ties with the old state and track your days
The old state will look at your life there after you leave. The more ties it finds, the harder the move is to defend.
- Home: Sell the home or end the lease. California treats a retained home as evidence of residency, and New York counts rented places toward statutory residency.
- Family and belongings: A California tax law firm describes the location of dependent children as one of the strongest signs of domicile. New York asks where your valued belongings are kept, so moving them supports the change.
- Day count: Keep a daily log of where you sleep. New York places the burden on you to prove that you stayed under 183 days.
- Final old-state return: File a part-year resident return for the year you leave. California uses Form 540NR for this.
Moves that happen close to a large income event, such as the sale of a business, tend to draw extra attention from California reviewers.
Mistakes that can undo the move
Three situations can undo a move even when the paperwork is in order.
- Relying on a mailbox: A mail address does not create domicile on its own. Florida’s Department of State found that a Declaration of Domicile did not prove residence in a county. The license in that case showed a mail forwarding address. Texas does not accept forwarded mail as proof of residence.
- An employer in a convenience-rule state: New York may tax the wages of a nonresident who works remotely for a New York employer. The exception is when the employer requires the remote location. Delaware, Nebraska, and Pennsylvania apply similar rules. Connecticut and New Jersey apply a reciprocal version. Sources list slightly different states, so ask your payroll team how your wages are sourced.
- Income that stays tied to the old state: Nonresidents owe tax on income earned inside a state. New York, for example, can tax rental income from an apartment you still own there. The tax applies even if you manage it from abroad, according to a tax firm that serves Americans abroad.
Where to check the rules
- South Dakota Department of Public Safety, full-time travelers page
- Texas Department of Public Safety, residency requirement page
- Florida Highway Safety and Motor Vehicles, documents page
- California Franchise Tax Board Publication 1031 and the New York Department of Taxation and Finance nonresident audit guidelines
Conclusion
A clear home state gives you one answer when a state asks where you live. A strong choice is a state you can back with a real address, a new license, and a daily log of where you sleep. Once the tax side is settled, the next task is planning your route. When you are ready, search flights on FlyBibe and book your next stretch of work abroad.
Tax and residency rules change, and each state applies them in its own way. This article gives general information as of October 18, 2026, and is not tax or legal advice. Confirm current rules with the agencies named above and with a qualified tax professional before you change your home state.