If a family member with dementia or another serious illness is moved into a New York nursing home by a relative acting under power of attorney, does that make the person a New York resident for income tax purposes?

Plain-English summary

Petitioner is the Estate of Rosa M. Schmitz. Ms. Schmitz was born in New York in 1905 but moved to Roanoke, Virginia in 1955, where she bought a home and lived for decades. In the mid-1980s her health began to decline, and in 1987 she gave her son Robert power of attorney over her affairs. By the summer of 1998, at age 93, she was suffering from advanced Alzheimer's disease along with bladder and breast cancer, and could no longer care for herself. Acting under his power of attorney, her son had her admitted to the Wynwood adult care facility in Niskayuna, New York (later moving her to the better-equipped Clare Bridge facility), because that is where family members lived. Her Roanoke home was sold on December 26, 1998, and her belongings were split between her children or given to charity. She kept a Virginia driver's license (which she let lapse once she became unfit to drive), kept her bank accounts and a trust with a Virginia bank, and had executed her will in Virginia. She died at the Clare Bridge facility in New York on October 7, 1999.

The question was whether Ms. Schmitz was domiciled in, or a statutory resident of, New York State during 1998 and 1999 under Tax Law § 605(b)(1). The Department held she was neither. Citing 20 NYCRR § 105.20(d) and its own prior ruling in Mae LaBue, TSB-A-91(10)I, the Department reasoned that a change of domicile requires both a physical move and a bona fide intention to abandon the old domicile and make the new location a fixed and permanent home. Because Ms. Schmitz's presence in New York resulted from her physical and mental incapacity rather than her own intent and decision to make New York her permanent home, she remained domiciled in Virginia. Separately, under Stranahan v. NYS Tax Commn, 68 AD2d 250, and Mae LaBue, her time in the New York adult care facilities also did not count as days spent in New York for purposes of the 183-day statutory-residence test in Tax Law § 605(b)(1)(B), and she did not maintain a permanent place of abode in New York within the meaning of 20 NYCRR § 105.20(e). Accordingly, Ms. Schmitz was not a New York statutory resident for 1998 or 1999.

What this means for you

Families and powers-of-attorney relocating an incapacitated relative into a NY care facility

If you move an elderly or incapacitated relative into a New York adult care facility or nursing home because that is where family can look after them - not because they themselves chose to make New York their permanent home - that relocation, by itself, does not change their state of domicile. Keeping ties to the prior home state (such as maintaining bank accounts, a will, or vehicle registration there, even if a driver's license simply lapses) supports the conclusion that the relative remained domiciled in the original state, as it did here for Ms. Schmitz's continued Virginia domicile.

Accountants preparing returns for elderly clients admitted to NY care facilities from out of state

When a client (or a client's estate) is admitted to a New York care facility due to incapacity rather than voluntary choice, both halves of the residency analysis under Tax Law § 605(b)(1) need to be checked separately: (A) whether domicile changed, and (B) whether the person became a statutory resident by maintaining a permanent place of abode and spending more than 183 days in New York. As this opinion illustrates, days spent in a New York nursing home or adult care facility due to incapacity - like days spent in a medical facility for treatment of a serious illness under Stranahan - are not counted toward the 183-day threshold, and the facility itself is not a "permanent place of abode" under 20 NYCRR § 105.20(e) in that circumstance. Note also that Ms. Schmitz's family filed a part-year resident return with New York for 1998, the year of her admission, alongside a Virginia return - a pattern worth considering when a relocation occurs mid-year even though the individual's domicile did not change.

Common questions

Q: Did Ms. Schmitz become domiciled in New York when she moved into the Niskayuna adult care facilities?
A: No. A change of domicile requires both a physical change of residence and a bona fide intention to abandon the old domicile and make the new location a fixed and permanent home. Because her move to New York resulted from her advanced Alzheimer's disease and cancer rather than her own intent and decision, she remained domiciled in Virginia under 20 NYCRR § 105.20(d).

Q: Does it matter that her Roanoke home was sold and her family believed she would never return to Virginia?
A: The Department did not treat the sale of the Roanoke home as changing the domicile analysis; what mattered was that her presence in New York was due to incapacity, not her own voluntary intent to relocate permanently. She kept other Virginia ties, including her bank accounts, trust, and will.

Q: Separately from domicile, could Ms. Schmitz have been a New York statutory resident under the 183-day rule?
A: No. Tax Law § 605(b)(1)(B) requires maintaining a permanent place of abode in New York and spending more than 183 days there. Following Stranahan v. NYS Tax Commn and Mae LaBue (TSB-A-91(10)I), her time in the adult care facilities did not count as days in New York for this test, and she was not found to maintain a permanent place of abode there.

Q: What was the Mae LaBue precedent the Department relied on?
A: In TSB-A-91(10)I, a New Jersey domiciliary was admitted to a New York nursing home, expected to spend the rest of her life there, because she needed constant nursing care and could not perform daily tasks herself. The Department held her presence in New York resulted from physical or mental incapacity rather than her own intent, so she remained a New Jersey domiciliary, and her nursing-home stay did not count as maintaining a permanent place of abode or as days in New York under the 183-day rule.

Q: Does hospitalization in New York for a medical condition count toward New York residency?
A: Under Stranahan v. NYS Tax Commn, 68 AD2d 250, time spent in a New York medical facility being treated for a serious illness is not counted in determining whether a nondomiciliary is a resident of New York during that confinement - the same principle the Department applied to Ms. Schmitz's time in the adult care facilities.

Q: Why did it matter who was making the decision to move Ms. Schmitz, given she acted through a power of attorney?
A: The relevant question under 20 NYCRR § 105.20(d) is whether the individual (through those legally acting for her) had the bona fide intent to make New York her fixed and permanent home. Because Ms. Schmitz's admission to the New York facilities was driven by her incapacity and need for care rather than a voluntary choice to relocate permanently, the Department found no such intent, regardless of who physically arranged the move.

Citations and references

• Tax Law § 605(b)(1)(A) - an individual domiciled in New York State is a resident unless the individual maintains no permanent place of abode in New York, maintains a permanent place of abode elsewhere, and spends no more than 30 days of the year in New York
• Tax Law § 605(b)(1)(B) - an individual not domiciled in New York is nonetheless a statutory resident if the individual maintains a permanent place of abode in New York and spends more than 183 days of the year in New York
• 20 NYCRR § 105.20(d) - domicile is the place an individual intends as a permanent home and to which the individual intends to return when absent; domicile continues until the person moves elsewhere with the bona fide intention of making that new location a fixed and permanent home
• 20 NYCRR § 105.20(e) - a permanent place of abode is a dwelling place permanently maintained by the taxpayer, whether or not owned by the taxpayer
• Stranahan v. NYS Tax Commn, 68 AD2d 250 - time a nondomiciliary spends in a New York medical facility being treated for a serious illness is not counted toward New York residency during that confinement
• TSB-A-91(10)I (Mae LaBue) - a nondomiciliary admitted to a New York nursing home due to physical or mental incapacity, rather than her own intent, retained her prior domicile, and her nursing-home stay did not count as maintaining a permanent place of abode or as days in New York under the 183-day rule

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_2000.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a00_3i.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-00(3)I
Income Tax
May 31, 2000

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I000128D

On January 28, 2000, a Petition for Advisory Opinion was received from the Estate of Rosa
M. Schmitz, c/o Hodgson, Russ, Andrews, Woods & Goodyear, LLP, One M&T Plaza, Suite 2000,
Buffalo, New York 14203.
The issue raised by Petitioner, the Estate of Rosa M. Schmitz, is whether Ms. Schmitz was
domiciled in or a statutory resident of New York State during 1998 and 1999 under section 605(b)(1)
of the Tax Law.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Ms. Schmitz was born in New York on August 11, 1905. She married, and in 1955 she
moved to Roanoke, Virginia, where she purchased a single-family home at 2107 Carter Road. She
did not continue to maintain a house in New York after her move to Roanoke.
In the mid-1980's, Ms. Schmitz’s health began to decline and she was diagnosed with an
early state of Alzheimer’s disease. On September 17, 1987, she appointed her son Robert Schmitz
power-of-attorney over her affairs.
Ms. Schmitz continued to live in her Roanoke home until the summer of 1998, when, at the
age of 93, she was no longer able to care for herself. She was suffering from advanced bladder and
breast cancer, and her Alzheimer’s had progressed to the point where she was no longer competent.
Consequently, she required constant nursing care.
In the summer of 1998, Ms. Schmitz’s immediate family consisted of her son Robert
Schmitz, who lived in Scotia, New York; her daughter Rosalie Johnson, who lived in Peoria, Illinois;
and her elderly sister Maria McCane, who lived in the Baptist nursing home in Scotia, New York.
Acting in his capacity as power-of-attorney, Robert Schmitz had his mother admitted to the
Wynwood adult care facility in Niskayuna, New York, on August 14, 1998. He subsequently had
his mother admitted to the Clare Bridge adult care facility in Niskayuna, New York because it was
better equipped to care for her as her condition continued to deteriorate.
Due to her advanced age and failing health, Ms. Schmitz’s family understood that she would
never return to her home in Roanoke. Consequently, acting in his capacity as power-of-attorney,
Robert Schmitz listed Ms. Schmitz’s Roanoke home for sale shortly after her admission to the

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Wynwood facility. The Roanoke home was sold on December 26, 1998. Ms. Schmitz maintained
no other homes.
During her life, Ms. Schmitz kept all of her valuable possessions at her home in Roanoke.
Once her home was sold, her household items were split between her son and daughter, and movers
were employed to bring these items to their respective homes. Many items were left to a local
charity in Virginia.
While living in Virginia, Ms. Schmitz had a Virginia driver’s license and her vehicles were
registered in Virginia. She became unfit to drive while living in Virginia, and her license was
allowed to lapse. Her car was given to a family member.
Ms. Schmitz had no active business involvement in New York or Virginia.
Prior to her relocation to New York, Ms. Schmitz spent the bulk of her time at her home in
Roanoke. She occasionally traveled to visit her son and daughter in their respective states.
While she was competent, Mrs. Schmitz maintained a safe deposit box at First Virginia
Bank-Southwest, but it was emptied and discontinued when she began to fail mentally. In May of
1993, all of her equities and securities were put in trust with First Virginia Bank-Southwest, and she
maintained a checking and savings account with this bank up until the time of her death, which her
son Robert Schmitz used to pay her bills as power-of-attorney. All bank statements, bills and other
financial documents were sent to Robert Schmitz as power-of-attorney.
Ms. Schmitz’s last will and testament was drawn up and executed in Virginia.
Ms. Schmitz filed her state tax returns as a Virginia resident until 1998, when her family had
her admitted to the Wynwood facility in Niskayuna. Her son, acting as power-of-attorney, filed 1998
part-year resident tax returns on her behalf with both Virginia and New York.
In 1999, while a patient at the Clare Bridge facility in Niskayuna, Ms. Schmitz was
hospitalized with a broken leg. Mrs. Schmitz was readmitted to the facility upon her release from
the hospital, and she died shortly thereafter on October 7, 1999, at the age of 94.
Discussion
Section 605(b)(1) of the Tax Law provides that a resident individual is (A) an individual who
is domiciled in New York State unless the individual maintains no permanent place of abode in New
York State, maintains a permanent place of abode elsewhere, and spends in the aggregate not more
than 30 days of the taxable year in New York State, or (B) an individual who is not domiciled in

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New York State but maintains a permanent place of abode in New York State and spends in the
aggregate more than 183 days of the taxable year in New York State.
Section 105.20(d) of the Personal Income Tax Regulations provides that domicile, in general,
is the place which as individual intends to be such individual’s permanent home – the place to which
such individual intends to return whenever the individual may be absent. A domicile once
established continues until the person in question moves to a new location with the bona fide
intention of making such person’s fixed and permanent home there. No change of domicile results
from a removal to a new location if the intention is to remain there only for a limited time.
Section 105.20(e) of the Personal Income Tax Regulations provides that a permanent place
of abode means a dwelling place permanently maintained by the taxpayer, whether or not owned by
the taxpayer, and will generally include a dwelling place owned or leased by his or her spouse.
In Stranahan v NYS Tax Commn, 68 AD2d 250, it was held that when a nondomiciliary
sought treatment in New York for a serious illness, the time spent in a medical facility for the
treatment of such illness should not have been counted in determining whether the nondomiciliary
was a resident of New York, for purposes of Article 22,during such confinement.
In Mae LaBue, Adv Op, Comm T&F, December 24, 1991, TSB-A-91(10)I, the petitioner was
domiciled in New Jersey prior to her admittance to a nursing home in New York State where it was
believed that she would spend the rest of her life. The petitioner’s admission was made because she
was unable to perform menial tasks, and she needed constant nursing care, including the
administering of medication by a nurse. It was held that her presence in New York State was not the
result of her own intent and decision but due to a physical or mental incapacity, and she remained
a domiciliary of New Jersey during the period of time she was in the nursing home in New York.
It was further held, that her stay in the nursing home did not constitute the maintenance of a
permanent place of abode in New York State and any day spent in such facility did not count as a
day in New York for purposes of the 183 day rule to be considered a statutory resident of New York.
To effect a change of domicile there must be not only a physical change of residence but an
intention to abandon the former domicile and to acquire another. In this case, Ms. Schmitz was a
domiciliary of Virginia, and only came into New York to live in adult care facilities after she became
incompetent and unable to care for herself. Assuming that, due to her incapacity, her presence in
New York was not the result of her own intent and decision to make New York her fixed and
permanent home pursuant to section 105.20(d) of the Personal Income Tax Regulations, Ms. Schmitz
remained a domiciliary of Virginia.
Further, under these circumstances, following Mae LaBue, supra, and Stranahan, supra, Ms.
Schmitz did not maintain a permanent place of abode in New York and spend more than 183 days

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in New York during the years in question. Accordingly, Ms. Schmitz was not a statutory resident
of New York State under section 605(b)(1)(B) of the Tax Law.

DATED: May 31, 2000

NOTE:

/s/
John W. Bartlett
Deputy Director
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.