Should you notify your work?

Disclaimer: none of the following is legal or financial advice.

During the pandemic, a lot of employees quietly relocated without telling their company. While their initiative is laudable, there are...complications. Here's a quick overview of what to consider.

Employment law and corporate taxes

Your employer has serious obligations when it comes to following state and local laws. They have to pay taxes differently, handle withholding differently, register with the state, change their policies, etc. If you move without their knowledge and they find themselves in non-compliance, a lawyer may tell them to "sever the employee" and you'll be in a bad spot.

Personal residency (domicile)

Where you officially live (aka your domicile) makes a big difference for you:

• It determines who you pay state and local taxes to and at what rates
• Many states give a property tax discount only for your primary residence
• It determines which elections you can vote in and when
• It factors into bank loans and eligibility for corporate and government programs

There's an especially big question around "when did you establish domicile?" so you can figure out who you owe what to. You can find yourself in a position where multiple states claim they can all tax your income! Consult a tax accountant in advance to find out what steps you must take to establish residency. For some states, they look at the date you applied for a new drivers license. Others have a multi-part test. Others require a document attesting a change of residency.

Many tax accountants will tell you that if you pay too much in withholding, when you leave it's almost impossible to get that money back. So they often recommend you reduce your withholding before you move, and pay any difference at filing time. It's better to owe the state than have the state owe you and never pay!

Company policy

A lot of companies have a proximity requirement for jobs, either because of a work requirement, upcoming return-to-office mandate, or to simplify their legal obligations (keeping track of employment law in 50 states is costly and not fun). Understand how your employer will react if they discover you've fled the coop and form a strategy.

How to tell your work

Much could be written here, but the most important thing to keep in mind is that telling your manager is not enough. HR will be aware of implications here that your boss is not, so it's a good idea to ask them in writing what the company policies are and get approval in advance.