Section 100.3020 Resident (IITA Section 301)

Section 100

TITLE 86: REVENUE

CHAPTER I: DEPARTMENT OF REVENUE

PART 100 INCOME TAX

SECTION 100.3020 RESIDENT (IITA SECTION 301)

Section 100.3020 Resident

(IITA Section 301)

a)         General definition. The term "resident" is defined

in IITA Section 1501(a)(20) to mean:

1)         an individual who is in Illinois for other than a temporary or

transitory purpose during the taxable year or who is domiciled in Illinois but

is absent from Illinois for a temporary or transitory purpose during the

taxable year;

2)         the estate of a decedent who, at his or her death, was

domiciled in Illinois;

3)         a trust created by the will of a decedent who, at his or her

death, was domiciled in Illinois; and

4)         an irrevocable trust, the grantor of which was domiciled in Illinois

at the time the trust became irrevocable. For the purpose of this subsection

(a)(4), a trust is considered irrevocable to the extent that the grantor is not

treated as the owner of the trust under 26 USC 671 through 678.

b)         Individuals. The purpose of the general definition is to

include in the category of individuals who are taxable on their entire net

income, regardless of whether derived from sources within or without Illinois, and

all individuals who are physically present in Illinois enjoying the benefit of its

government, except those individuals who are here temporarily, and to exclude from

this category all individuals who, although domiciled in Illinois, are outside

Illinois for other than temporary and transitory purposes and, hence, do not obtain

the benefit of Illinois government. If an individual acquires the status of a

resident by virtue of being physically present in Illinois for other than temporary

or transitory purposes, he or she remains a resident even though temporarily

absent from Illinois. If, however, he or she leaves Illinois for other than

temporary or transitory purposes, he or she ceases to be a resident

o not obtain

the benefit of Illinois government. If an individual acquires the status of a

resident by virtue of being physically present in Illinois for other than temporary

or transitory purposes, he or she remains a resident even though temporarily

absent from Illinois. If, however, he or she leaves Illinois for other than

temporary or transitory purposes, he or she ceases to be a resident. If an

individual is domiciled in Illinois, he or she remains a resident unless he or

she is outside Illinois for other than temporary or transitory purposes.

c)         Temporary or transitory purposes. Whether or not the purpose

for which an individual is in Illinois will be considered temporary or

transitory in character will depend upon the facts and circumstances of each

particular case. It can be stated generally, however, that if an individual is simply

passing through Illinois on his or her way to another state, or is here for a

brief rest or vacation or to complete a particular transaction, perform a particular

contract, or fulfill a particular engagement that will require his or her

presence in Illinois for but a short period, he or she is in Illinois for

temporary or transitory purposes and will not be a resident by virtue of his or

her presence here. If, however, an individual is in Illinois to improve his or

her health and his or her illness is of such a character as to require a relatively

long or indefinite period to recuperate, or he or she is here for business

purposes that will require a long or indefinite period to accomplish, or is

employed in a position that may last permanently or indefinitely, or has retired

from business and moved to Illinois with no definite intention of leaving

shortly thereafter, he or she is in Illinois for other than temporary or transitory

purposes and, accordingly, is a resident taxable upon his or her entire net

income even though he or she may also maintain an abode in some other state.

1)         EXAMPLE 1

sition that may last permanently or indefinitely, or has retired

from business and moved to Illinois with no definite intention of leaving

shortly thereafter, he or she is in Illinois for other than temporary or transitory

purposes and, accordingly, is a resident taxable upon his or her entire net

income even though he or she may also maintain an abode in some other state.

1)         EXAMPLE 1. X is domiciled in Fairbanks, Alaska, where he had lived

for 50 years and had accumulated a large fortune. For medical reasons, X moves

to Illinois where he now spends his entire time, except for yearly summer trips

of about three or four months duration to Fairbanks. X maintains an abode in

Illinois and still maintains, and occupies on visits there, his old abode in

Fairbanks. Notwithstanding his abode in Fairbanks, because his yearly sojourn

in Illinois is not temporary or transitory, he is a resident of Illinois and is

taxable on his entire net income.

AGENCY NOTE:  If,

in the foregoing example, the facts are reversed so that Illinois is the state

of original domicile and Alaska is the state in which the person is present for

the indicated periods and purposes, X is not a resident of Illinois within the

meaning of the law, because he is absent from Illinois for other than temporary

or transitory purposes.

2)         EXAMPLE 2. Until the summer of 1969, Y admitted domicile in Illinois.

At that time, however, to avoid the Illinois income tax, Y declared himself to

be domiciled in Nevada, where he had a summer home. Y moved his bank accounts

to banks in Nevada and each year thereafter spent about three or four months in

Nevada. He continued to spend six or seven months of each year at his estate in

Illinois, which he continued to maintain, and continued his social club and

business connections in Illinois. The months not spent in Nevada or Illinois he

spent traveling in other states

he had a summer home. Y moved his bank accounts

to banks in Nevada and each year thereafter spent about three or four months in

Nevada. He continued to spend six or seven months of each year at his estate in

Illinois, which he continued to maintain, and continued his social club and

business connections in Illinois. The months not spent in Nevada or Illinois he

spent traveling in other states. Y is a resident of Illinois and is taxable on

his entire net income, for his sojourns in Illinois are not for temporary or

transitory purposes.

AGENCY NOTE:  If,

in the foregoing example, the facts are reversed so that Nevada is the state of

his original domicile and the state in which the person is present for the

indicated periods and purposes, Y is not a resident of Illinois within the

meaning of the law because he is absent from Illinois for other than temporary

or transitory purposes.

3)         EXAMPLE 3. B and C, husband and wife, domiciled in Minnesota where

they maintain their family home, come to Illinois each November and stay here

until the middle of March. Originally they rented an apartment or house for the

duration of their stay here but three years ago they purchased a house here. The

house is either rented or put in the charge of a caretaker from March to November.

B has retired from active control of his Minnesota business but still keeps

office space and nominal authority in it. He belongs to clubs in Minnesota, but

to none in Illinois. He has no business interests in Illinois. C has little

social life in Illinois, more in Minnesota, and has no relatives in Illinois. Neither

B nor C is a resident of Illinois. The connection of each to Minnesota, the

state of domicile, in each year is closer than it is to Illinois. Their

presence here is for temporary or transitory purposes.

AGENCY NOTE:  If,

in the foregoing example, the facts are reversed so that Illinois is the state

of domicile and B and C are visitors to Minnesota, B and C are residents of

Illinois.

d)         Domicile

a resident of Illinois. The connection of each to Minnesota, the

state of domicile, in each year is closer than it is to Illinois. Their

presence here is for temporary or transitory purposes.

AGENCY NOTE:  If,

in the foregoing example, the facts are reversed so that Illinois is the state

of domicile and B and C are visitors to Minnesota, B and C are residents of

Illinois.

d)         Domicile. Domicile has been defined as the place where an individual

has his or her true, fixed, permanent home and principal establishment, the

place to which he or she intends to return whenever absent. It is the place in

which an individual has voluntarily fixed the habitation of himself or herself

and family, not for a mere special or limited purpose, but with the present

intention of making a permanent home, until some unexpected event shall occur to

induce adoption of some other permanent home. Another definition of

"domicile" consistent with this is the place where an individual has

fixed his or her habitation and has a permanent residence without any present

intention of permanently moving. An individual can at any one time have but one

domicile. If an individual has acquired a domicile at one place, he or she

retains that domicile until he or she acquires another elsewhere. Thus, if an individual

who has acquired a domicile in California, for example, comes to Illinois for a

rest or vacation or on business or for some other purpose, but intends either

to return to California or to go elsewhere as soon as his or her purpose in Illinois

is achieved, he or she retains domicile in California and does not acquire

domicile in Illinois. Likewise, an individual who is domiciled in Illinois and

leaves the State retains Illinois domicile as long as he or she has the definite

intention of returning to Illinois

r some other purpose, but intends either

to return to California or to go elsewhere as soon as his or her purpose in Illinois

is achieved, he or she retains domicile in California and does not acquire

domicile in Illinois. Likewise, an individual who is domiciled in Illinois and

leaves the State retains Illinois domicile as long as he or she has the definite

intention of returning to Illinois. On the other hand, an individual domiciled in

California who comes to Illinois with the intention of remaining indefinitely

and with no fixed intention of returning to California loses his or her California

domicile and acquires Illinois domicile the moment he or she enters the State. Similarly,

an individual domiciled in Illinois loses Illinois domicile:

1)         by locating elsewhere with the intention of establishing the new

location as his or her domicile; and

2)         by abandoning

any intention of returning to Illinois.

e)         Minors. The domicile of a minor is ordinarily the same as the

domicile of his or her parents or guardians. If the father is deceased, the

domicile of a minor is ordinarily the same as the domicile of the mother and

vice versa. In either case, if the minor's parents are divorced, the domicile

of the minor is the same as the domicile of the parent having custody.

f)         Presumption of residence. The following create rebuttable

presumptions of residence.  These presumptions are not conclusive and may be

overcome by clear and convincing evidence to the contrary.

1)         An individual receiving a homestead exemption (see 35 ILCS

200/15-175) for Illinois property is presumed to be a resident of Illinois.

2)         An individual who is an Illinois resident in one year is

presumed to be a resident in the following year if he or she is present in

Illinois more days than he or she is present in any other state

ear and convincing evidence to the contrary.

1)         An individual receiving a homestead exemption (see 35 ILCS

200/15-175) for Illinois property is presumed to be a resident of Illinois.

2)         An individual who is an Illinois resident in one year is

presumed to be a resident in the following year if he or she is present in

Illinois more days than he or she is present in any other state.

g)         Proof

of residence or nonresidence

1)         The type and amount of proof that will be required in all

cases to establish residency or nonresidency or to rebut or overcome a

presumption of residence cannot be specified by a general regulation, but will

depend largely on the circumstances of each particular case. The taxpayer may submit

any relevant evidence to the Department for its consideration. The evidence may

include, but is not limited to, affidavits and evidence of:  location of spouse

and dependents; voter registration; automobile registration or driver's license;

filing an income tax return as a resident of another state; home ownership or

rental agreements; the permanent or temporary nature of work assignments in a

state; location of professional licenses; location of medical professionals,

other healthcare providers, accountants and attorneys; club and/or organizational

memberships and participation; and telephone and/or other utility usage over a

duration of time. In appropriate instances, the Department may request any

relevant evidence that may assist it in determining the taxpayer's place of

residence

te; location of professional licenses; location of medical professionals,

other healthcare providers, accountants and attorneys; club and/or organizational

memberships and participation; and telephone and/or other utility usage over a

duration of time. In appropriate instances, the Department may request any

relevant evidence that may assist it in determining the taxpayer's place of

residence.

2)         The location of any corporation, foundation, organization or

institution that is exempt from taxation under IRC section 503(c)(3) to which

the taxpayer makes financial contributions, gifts, bequests, donations or

pledges in any amount qualifying for a deduction as an IRC section 170(a)

charitable contribution or as an IRC section 2055(a) bequest, legacy, devise or

transfer is not evidence used to establish domicile or nondomicile, or

residence or nonresidence, in any state.

3)         If an individual is presumed under this Section to be a

resident for any taxable year, he or she should file a return for that year even

though he or she believes he or she was a nonresident who, as such, would not

incur an Illinois income tax liability because he or she would have no income allocable

or apportionable to Illinois. The return will enable the individual to avoid

the possible imposition of penalties for failure to file under IITA Section

1001 should it later be determined that he or she was a resident for the

taxable year. The return should be marked as a nonresident return, though

Schedule NR is not required. The return should exhibit the computation of net

income as though the individual were a resident. The line on the return

provided for entering the tax liability should have the following notation: "No

liability – nonresident". The return should be accompanied by a signed statement

indicating which presumption of residence the individual was subject to and setting

forth in detail the reasons why the individual believes he or she was a

nonresident for the taxable year

idual were a resident. The line on the return

provided for entering the tax liability should have the following notation: "No

liability – nonresident". The return should be accompanied by a signed statement

indicating which presumption of residence the individual was subject to and setting

forth in detail the reasons why the individual believes he or she was a

nonresident for the taxable year. The return should also be accompanied by any evidence,

such as certificates or affidavits, that the individual is able to obtain

showing that he or she was a nonresident for the taxable year. If the

Department is not satisfied that the individual was a nonresident, it will so inform

the individual and provide him or her with an opportunity to submit additional

information supporting his or her contention. If the individual fails to submit

additional information, or if the additional information submitted does not, when

considered with the information appended to the return, overcome the presumption

that the individual was a resident for the taxable year, the Department will

issue a notice of deficiency asserting a liability against the individual on

the following basis:

A)        that

the individual is a resident for the taxable year; and

B)        that

the individual's net income for the taxable year is:

i)          the amount reflected, with appropriate mathematical error adjustments

under IITA Section 903(a)(1), on the return filed by the individual under this

subsection (g)(3)(B)(i); or

ii)         whatever other amount the Department has determined by an

examination under IITA Section 904.

4)         An individual who, for any taxable year, believes himself or

herself to be a nonresident, but who is presumed to be a resident under this

Section, may file a return (including a Schedule NR) as a nonresident if, as a

nonresident, he or she incurs an Illinois income tax liability due to income

allocated or apportioned to Illinois as a nonresident

examination under IITA Section 904.

4)         An individual who, for any taxable year, believes himself or

herself to be a nonresident, but who is presumed to be a resident under this

Section, may file a return (including a Schedule NR) as a nonresident if, as a

nonresident, he or she incurs an Illinois income tax liability due to income

allocated or apportioned to Illinois as a nonresident. However, the return should

be accompanied by a signed statement indicating which presumption of residence the

individual is subject to and setting forth in detail the reasons why the

individual believes he or she was a nonresident for the taxable year. The return

should also be accompanied by any evidence, such as certificates or affidavits,

that the individual is able to obtain showing that he or she was a nonresident

for the taxable year. If the Department is not satisfied that the individual

was a nonresident, it will so inform the individual and provide him or her with

an opportunity to submit additional information supporting his or her contention.

If the individual fails to submit additional information, or if the additional

information submitted does not, when considered with the information appended

to the return, overcome the presumption that the individual was a resident for

the taxable year, the Department will issue a notice of deficiency asserting a liability

against the individual on the following basis:

A)        that

the individual was a resident for the taxable year;

B)        that

the individual's net income for the taxable year is:

i)          his or her entire base income, as reflected on the return

with appropriate mathematical error adjustments under IITA Section 903(a)(1), less

the appropriate standard exemption prescribed by IITA Section 204; or

ii)         his or her entire base income, as determined by the Department

in an examination under IITA Section 904, less the appropriate standard exemption

prescribed by IITA Section 204.

h)         Military personnel

reflected on the return

with appropriate mathematical error adjustments under IITA Section 903(a)(1), less

the appropriate standard exemption prescribed by IITA Section 204; or

ii)         his or her entire base income, as determined by the Department

in an examination under IITA Section 904, less the appropriate standard exemption

prescribed by IITA Section 204.

h)         Military personnel. Under 50 USC App. 571, members of the U.S.

Armed Forces (and commissioned officers of the U.S. Public Health Service) will

not cease to be domiciled in Illinois solely by reason of their assignment to duty

in other states for long periods. Domiciliaries of other states will not become

Illinois residents under the Act solely by reason of their presence in Illinois

under military orders.

i)          Resident: Legal Definition: Usage. The term "resident"

is defined differently for different purposes. For example, an individual may be

a "resident" for Illinois income tax purposes but not a

"resident" eligible to vote (see IITA Section

15-1501(a)(20)

with Sections 3-1 through 3-4 of the Election Code [10 ILCS 5/3-1 through

3-4]). Similarly, a person may be a resident of Illinois for Illinois income

tax purposes and also a resident of another state for purposes of that state's

income tax law (see IITA Section 15-1501(a)(20) with Ky. Rev. Stat. Ann.

Section 141.010(17)).