Recently pruchased a home in NC. Am in NC more than 6 months out of year, but husband is currently workign FT in DC area. I am federal retiree and can benefit from NC state tax which DOES NOT tax my federal retirement. What steps do I need to take to establish such residency for tax purposes?

Do my husband and I need to file separately? We currently file jointly?

My first inclination is to get dirvers license -- easy enough -- but what does that set in motion for checkign accounts, car registration, etc. Husband is still primary in DC and we are jointly on everything? Any advice before I dive in?

You can still file jointly.

For 2008, you will file as a part-year resident for NC and presumably) a part-year resident for DC, while your husband remains a full-time resident for DC.

Some pro-ration of income will have to be done on the NC and DC returns, but nothing any competent tax pro could not handle.

In either case, you would pay taxes ONLY on the income earned in each respective locale once you have properly established domicile in NC.

A valid argument can be made that you in fact established domicile in NC when you made the purchase of the home.