During the Covid pandemic, many wealthy individuals moved from high-tax states like New York and California to low-tax states such as Florida and Texas. These moves are now being challenged by states claiming they weren't permanent or legitimate. Tax auditors and AI programs are examining cellphone records to determine where taxpayers spent most of their time. Additionally, states like New York argue that if you are employed by a New York company, you owe New York taxes, even if you live and work elsewhere.
Key takeaways:
- State tax collectors have become more aggressive with audits of high earners, with New York reporting a 56% increase in audits in 2022.
- Despite a decrease in the number of auditors, states are using Artificial Intelligence to determine the best audit candidates, focusing on high earners.
- High earners who moved from high-tax states to low-tax states during Covid are being challenged by states who claim the moves weren't permanent or legitimate.
- States like New York argue that if you are employed by a New York company, you owe New York taxes — even if you live and work in another state.