The difference between statutory residency and domiciliary residency and how both can affect personal income taxes:

Residents of a state are normally taxed on their worldwide income, while nonresidents are usually taxed only on state source income. Therefore, whether a taxpayer is a resident or nonresident will tremendously affect state taxes.

There are two ways an individual can be considered a resident for state personal income tax purposes: domicile; and/or statutory residency.

States define domicile differently, but in general it is the state where an individual maintains a principal place of abode and to which an individual intends to return. Residency is hard to prove, and states look at various factors and pieces of evidence to determine residency. Some primary domicile factors include time, home, business, family, lifestyle, personal items (near and dear).

Under the law of many states, a statutory resident is an individual who is physically present in the state for more than 183 days.

Be aware that an individual can be considered a statutory resident in one state and be considered as domiciled in another state.