When it comes to U.S. estate tax, residency does not follow the same rules as income tax. This is one of the most common—and costly—areas of confusion.

⚖️ 1️⃣ The Key Concept: Domicile

Under the

Internal Revenue Code:

👉 Estate tax residency is based on domicile, not income tax residency.

🧠 What Is Domicile?

Domicile requires:

• Physical presence in the United States, and

• Intent to remain indefinitely

👉 Both elements must be present.

🔍 2️⃣ A Facts-and-Circumstances Test

There is no single rule or day-count test.

Instead, the IRS looks at the totality of the situation, including:

🏠 Personal Ties

• Where you live

• Location of family (spouse, children)

• Permanent home ownership or lease

💼 Economic Ties

• Business interests

• Investments

• Bank accounts

• Employment or directorships

🌐 Social & Lifestyle Ties

• Club memberships

• Community involvement

• Where personal belongings are kept

• Health insurance and daily life indicators

❌ 3️⃣ Not the Same as Income Tax Residency

This is critical:

• Income tax uses tests like the substantial presence test

• Estate tax uses domicile (intent-based)

👉 You can be:

• A non-resident for income tax, but

• Still domiciled in the U.S. for estate tax

⚠️ 4️⃣ Why This Matters

If you are considered U.S.-domiciled:

• Your worldwide assets are subject to U.S. estate tax

If not domiciled:

• Only U.S.-situs assets are taxed

👉 The difference can be millions in tax exposure

🧠 5️⃣ Practical Risk Areas

• Long stays in the U.S. with no clear exit intent

• Owning a permanent home in the U.S.

• Family remaining in the U.S.

• Maintaining strong economic ties

🎯 Key Takeaway

For estate tax purposes:

• Residency = domicile (presence + intent)

• It is a facts-and-circumstances test

• It is completely different from income tax residency rules

In practice:

It’s not about how long you stay—it’s about whether it looks like you never planned to leave.

Estate Tax Residency Rules Simplified