Question

What is the Nine-Month Presumption of residence Rule

Answer 1

What is the Nine Month Presumption of Residence rule?

Answer: There are several rules in California to determine whether a person is considered a resident, part-resident or non-resident. These rules are complicated and at best subjective for many situations. One such rule is called nine month presumption rule.

The California tax code itself gives us this rule. The idea is that if a taxpayer spends inside the state of California for a total of more than nine months of the taxable year, the tax payer is presumed to be a resident.

However the presumption is rebuttable. Other factors may apply that result in you not being a legal resident. It depends on the stay of the person whether it is temporary or permanent.

The Franchise Tax Board (FTB) determines whether a visit is temporary or permanent by applying the Closest Connection Test. This refers to the state with which a person has the closest connection during the tax year in question. The FTB undertakes a fact and circumstances analysis. It looks at all facts in context. From a residency audit perspective, that can be bad news, since the FTB requires a taxpayer to provide not only financial information, but detailed information about where you spend your time, what you buy, the professionals you hire, the friends and family you socialize with, the kind of plane tickets you buy, etc.

Although we may normally presume that someone is a resident of California if they spend nine months or more within the state during the tax year, we definitely should not conclude that someone who does not spend nine months or more inside the state of California is not a resident of California, there are plenty of cases where someone spends little or no time inside California and yet is still considered a resident.