[garcia1989]

I am moving to TX and will be living there 5 days/wk and 2 days/wk in NC with my family where we own a home. I plan to open a bank account, register to vote, register my car and get a DL in TX. I'm renting an apartment. This is a permanent assignment. My wife does not work. Can I avoid paying NC state taxes?

[MukatA]

As you own a home in NC, you are resident of NC. You will report your worldwide income to NC. You can claim credit for taxes paid to other states. But since TX does not have income tax, you will not be paying any taxes to other states.

[AtlantaTaxExpert]

Agreed; since NC is your home of residence, you ARE liable to pay NC income taxes on the income earned in Texas.

[ebaines]

I disagree with my esteemed colleagues. Since you will be spending the majority of your time in TX, I think you can claim TX as your residence and consider NC as your second home (vacation home). It doesn't matter that you own property in NC and rent in TX - the important thing is where you spend the most time and your intent that TX be your long-term residence going forward. I had a similar situation when I first moved to TX from NJ, while my wife continued to live (and work) in NJ - I claimed TX as my residence and filed a part-year/non-resident return in NJ. That way only our NJ source of income was subjected to NJ taxes. In your case it sounds like you have no NC source income after you move, so you can file a part-yar resident return with NC for 2010 and nothing after that. Be sure to change the mailing addresses for all of your financial accounts to TX, and make sure your employer has your TX address as your home address, so that when they isssue their 1099 and W2 forms in January they show TX as the address.

[AtlantaTaxExpert]

I must disagree. North Carolina will argue that, while he works in Texas, he essentially lives and retains his domicile in NC by virtue of the fact that he retains a home which he purchased in NC, and returns their every weekend. Now, if he is actively trying to sell the house while working in Texas, then his intent to leave NC is clear.

However, because no one works in NC, the state will not get any paper trail to show any earned income, so following Ebaines advice will probably work.