A couple in their late sixties spent 40 years in Westchester County and watched their traditional individual retirement accounts (IRAs) grow past seven figures. Their plan was straightforward: buy near Naples, establish Florida residency, and convert $200,000 a year to Roth accounts without paying New York income tax. They bought the Florida house, changed their driver’s licenses, registered to vote, and redirected the mail. Then they kept the Scarsdale house for the grandchildren and returned for long summers, holidays, and medical appointments.
Their paperwork said Florida. Their calendar told a different story. Two years later, the New York State Department of Taxation and Finance opened a residency audit. The state wanted tax on every dollar of the conversions because the couple may never have escaped New York’s definition of a resident.
New York Has Two Ways to Pull Them Back In
The first is domicile, the one place someone considers a permanent home. New York says an existing domicile does not change until the taxpayer can clearly show that it was abandoned and another was established elsewhere. A Florida license and voter registration help, but they do not settle the matter. Auditors can compare the homes, time spent in each state, business connections, family ties, doctors, possessions, and the rhythm of daily life. Keeping the longtime house and continuing to use it heavily can make Florida look more like a winter address than a new permanent home.
The second route is statutory residency. Even if the couple successfully changed domicile, New York can still treat them as residents if they maintain a permanent place of abode in the state and spend at least 184 days there. Any part of a day generally counts. Lunch in Manhattan before an evening flight can become a New York day. The narrow transit exception helps someone merely passing through to catch a plane, train, or bus. It does not rescue an ordinary visit. Day 184 does not create tax on one extra day. It can make the couple residents for the year and pull their income, including the Roth conversions, back onto a New York return.
The Scarsdale House Keeps the Door Open
A permanent place of abode is generally a dwelling maintained by the taxpayer or spouse, suitable for year-round use, and available for substantially the entire year. The couple does not need to sleep there every week. Keeping the house available can be enough to establish one side of the statutory-residency test. The burden then falls on them to prove they remained below 184 days. Flight itineraries, toll records, credit-card charges, medical appointments, calendars, and phone-location records can all help reconstruct where they were.
On a $200,000 conversion, the New York bill can reach five figures after other income is added. Repeat the mistake across several years, then add interest and possible penalties, and much of the financial reason for moving disappears. One correction matters here: Westchester residents do not pay New York City income tax. New York State’s tax alone creates the exposure.
Social Security and Medicare Follow Different Maps
Neither New York nor Florida taxes Social Security benefits. The Roth conversion can still make more of those benefits federally taxable by raising provisional income. For a couple converting six figures, as much as 85% of their Social Security may enter taxable income. Medicare adds a second federal cost. The Income-Related Monthly Adjustment Amount (IRMAA) uses modified adjusted gross income (MAGI) from two years earlier. A conversion completed in 2026 can raise Part B and Part D premiums in 2028 regardless of where the couple lives.
Under the 2026 schedule, the first joint IRMAA threshold begins above $218,000. A $200,000 conversion stacked on Social Security, interest, dividends, or pension income can cross it quickly. Higher tiers add larger surcharges. A failed residency change can therefore leave the couple paying both New York tax and higher Medicare premiums on the same conversion.
The Federal Bracket Has Its Own Boundary
The conversion should also be sized around federal taxable income. For married couples filing jointly in 2026, the 24% bracket begins above $211,400 and runs through $403,550. The standard deduction is $32,200. IRMAA does not use taxable income, however. It uses modified adjusted gross income, before the standard deduction. A conversion can fit inside the 24% bracket while still crossing a Medicare line.
One conversion therefore encounters three maps: state residency, federal taxable income, and Medicare income. None draws its boundaries in quite the same place.
What to Settle Before Converting
Three steps can keep the Florida move from coming apart under audit:
- Establish the new domicile before converting. Build a life in Florida, not merely a paper trail. The home, doctors, financial relationships, possessions, and daily routines should support the address on the return.
- Count New York days as they happen. Keep a location log with receipts and travel records, and leave a buffer below 184. A forgotten afternoon should not decide the tax treatment of an entire year.
- Deal honestly with the old house. Selling removes the cleanest source of doubt. A genuine long-term lease that gives an unrelated tenant exclusive use may also change the analysis. Keeping the home furnished and ready for family visits keeps the statutory-residency question alive.
A Roth conversion cannot be recharacterized after the fact. By the time a residency audit begins, the income is already on the federal return and the money is already inside the Roth. The conversion may have happened in Florida. The house and the calendar decide whether New York still gets a cut.
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