US Tax Guide for New York Residents Living in Mexico

New York is one of the most aggressive states when it comes to taxing former residents. If you moved from New York to Mexico, New York may still consider you a tax resident if you maintain significant ties. New York does not conform to the federal FEIE.

New York Residency Rules

New York determines residency based on domicile and statutory residency. If you maintain a permanent place of abode in New York and spend more than 183 days there, you are a New York resident. Even if you don't meet the statutory residency test, New York may consider you a domiciliary if you maintain significant ties.

New York does not conform to the federal FEIE.

Mexico Tax Implications

Mexico taxes worldwide income for tax residents (183-day test or center of vital interests). Mexican tax rates reach up to 35% plus state taxes. The US-Mexico tax treaty applies.

FEIE vs FTC for New York Residents in Mexico

New York does not conform to the federal FEIE. This means:

• You can claim FEIE on your federal return
• New York will still tax the same income
• FTC may be available for New York if Mexico taxes the income

Common Mistakes New York Residents Make in Mexico

1. Assuming leaving New York ends state tax residency — New York aggressively pursues former residents.
2. Not updating driver's license and voter registration — Evidence of New York residency.
3. Claiming FEIE without understanding New York non-conformity — New York will still tax the income.
4. Not planning state tax exit before moving — State tax planning should happen before you leave.

State Tax Exit Strategy

To properly exit New York tax residency:

• Surrender New York driver's license
• Cancel New York voter registration
• Sell or rent out New York property
• Close New York bank accounts
• Document your move with a clear paper trail
• Consider establishing residency in a no-tax state before moving abroad

When to Get Professional Help

You should consider professional help if you have New York tax residency questions, foreign accounts exceeding $10,000, or complex income situations.

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FileAbroad explains U.S. federal tax and U.S. international information-reporting consequences of documented foreign facts. It does not provide foreign-country legal or tax representation, valuation opinions, banking or remittance advice, or advice on what a foreign authority will accept.

Scope statement reviewed 2026-08-30 · FileAbroad product/content owner