It’s both exciting and nerve-wracking to settle down somewhere new, but how do you establish residency in a new state? It’s fun to dream of all the new people, adventures, and opportunities that await you. However, you also have to consider the logistics of actually getting there—like finding a place to call home, packing up your belongings, and taking care of the paperwork.
If you’ve never relocated out of state before, you might not know that there are some things that you need to do before, during, and after your move. To help you through it, here’s a look at what to do when moving to a new state.
1. Compare Taxes and Other Costs
While you should never let taxes guide your ultimate decision of where to live, it’s something you need to take into consideration to inform your planning. For example, personal income tax is higher in some states than others. In fact, some states don’t have any income tax whatsoever.
In addition to state income tax, you should consider local property tax rates (which vary by state and county) in the event you plan to buy a home. Also, look for expenses like annual car inspections, registration, and licensing fees.
While these might seem small in the grand scheme of your big decision, when focusing on what to do when moving to a new state, getting your budget in order is one of the most important. Plus, while looking at the numbers, consider the cost of living in the area, like local rent prices, grocery prices, and gas prices.
Once you have these numbers in front of you, you might find you need a few extra dollars in savings before you can make the big move, but you’ll end up that much better off. So, plan your move carefully by thinking long-term beyond the cost of the moving truck.
2. Compile Your Important Documents
Before you pack up and move, you’ll need to have some essential documents. As you figure out how to establish residency in a new state, this is what you need to get together:
- At least three forms of ID to help you get a state ID card or driver’s license. This could include your passport, birth certificate, and social security number card.
- Insurance information and current registration for your vehicle, so you can license and register it in your new state. If you own the car outright, bring the title with you.
- References for your current or future employment along with paystubs or bank statements to prove your income or savings. This will help you find a rental or get a home loan.
It’s likely that you have a lot of this information scanned digitally or available online, some official offices (such as the DMV) may only accept a hard copy. Additionally, they may require the original version of your SSN card or birth certificate, so don’t assume a photocopy is enough to get you by.
While you’re thinking about what to do when moving to a new state, also take a few minutes to check the state and county websites. This can reveal helpful information, like whether an active license from your current state can be transferred without the need to take another driver’s test. If it doesn’t, you’ll need to add “studying up” to your to-do list.
3. Update Your IDs and Accounts
Getting your paperwork in order is important, but learning how to establish residency in a new state entails a laundry list of items. To help make the entire process easier, focus on these three priorities first:
- Get a state-issued ID card or driver’s license from your new state of residence.
- Update important accounts (bank account, insurance policies, etc.) with your new address.
- Go to the local DMV to get new license plates and update your car registration with your new information.
If you don’t have a permanent place of residence yet (e.g., you’re living in a hotel or a short-term rental), consider opening a Private Mailbox (PMB). You can use it as your address on your driver’s license, registration, and other documents.
4. Wait for Your Official Status
There you have it: You know how to establish residency in a new state, but you actually aren’t quite done yet. While you might feel like your move is official, a person is required to reside in a state for so many days (usually 183 days or about six months) before they officially earn residency status for tax purposes.
In the event that you’re hoping to establish residency to get in-state tuition at a university or qualify for state grants, you may need to wait even longer. This requirement is often set by the university or institution itself and could require you to be in the state full-time for a year or more.
What’s most important as you wait to achieve official residency status is that you keep your accountant up-to-date on where you are. If you don’t live in a state for more than 180 days before the end of the year, you may still have to pay income taxes in your old state.
Lastly, if you’re split equally between two states in a given year, you may have to pay income tax in both states. So, if you’re moving mid-year or back-and-forth, you’ll want to talk to your tax advisor about your obligations.
Find The Perfect Home With LemonBrew
Moving to a new area definitely comes with some extra paperwork, but once you figure out what to do when moving to a new state, it will prove well worth the adventures that lie ahead! So, if you’re thinking about buying a home in another state, it might be time to start looking for a partner to guide you through that process, too.
We can help you find the best home loan for your situation as soon as you’re ready. Or, if you already have a home, we can help you finance a second residence in another area. Ready to get started? Take the next step today!