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Answereda year ago

How can US expats avoid state income tax on 401k withdrawals while relocating to Thailand?

Pete ******
asked Sep 6, 2025
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Hi, I'm looking for advice from those US expats who changed their legal residence to a no income tax state prior to relocating to Thailand. I'm currently living in NY State and do not want to get hit with state tax on any future 401k withdrawals. Is there a recommended way to avoid this without physically moving to a non tax state? Thank you!
Answer summary
The post discusses strategies for U.S. expats looking to establish residency in a no income tax state to avoid state taxes on 401k withdrawals while relocating to Thailand. Suggestions include changing residency through short visits to states like Texas or South Dakota, using mail forwarding services, and establishing sufficient evidence of residency in Thailand to dispel claims of New York residency for tax purposes. Additional advice includes understanding tax treaties between the U.S. and Thailand.
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Edward *********
Edward *********
@Pete *****
Not NYS related, but just fyi, Social Security and (state) Pensions can't be taxed by Thailand due to a double-tax treaty between the US and Thailand:
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Edward *********
Edward *********
@Pete *****
this is a very good list of items that can help establish that you're no longer a NYS resident for tax purposes, while it only speaks of moving to other states, it's equally applicable to moving overseas:

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Edward *********
Edward *********
@Pete *****
If you become a full-time resident of Thailand, you're no longer a resident of NYS and do NOT have to pay NYS tax (you may eventually be asked to prove that you live in Thailand, but as long as you can have bills/statements in your name sent to you, and provide a copy of your passport stamps and Visa/renewals, you will be fine).

Evidence of using a Thai bank account, and using a credit card within Thailand is also good evidence of being a resident of Thailand, as well as receipts from medical appointments, etc.

And yes, I still keep a mailing address in NYS (with a relative).

You can also still be registered to vote in NY, but don't vote in any local (city/state) elections, or that will be considered as evidence towards residence in NYS.
Robert ******
Robert ******
Hi Pete

We are in process of changing over to. Florida address using Saint Brendan’s Isle mail service. They have different pay plans pick which works best for you. Before we leave we will drive down there and get a Fl license and register to vote there. Figured it’s on east coast and works best for us when we travel back to states.
Pete ******
Pete ******
OP
@Robert *****
Thanks! My research has led me to the same place. I think I'll fly down, see if I can get it done in a day, then fly home. They sound like a great solution!
Robert ******
Robert ******
@Pete *****
good luck Pete, I would open the mail account online before going down it’ll be one less step while your in Florida.
Chris ************
Chris ************
Be sure to consider that if you are no longer a tax resident in your country you could become a tax resident in another. Sometimes your country is a better choice when tax treaties exist.
Pete ******
Pete ******
OP
@Chris ***********
Thank you. I plan on keeping a US address for banking and other purposes, so I will always pay federal tax, but I want to avoid paying state taxes, especially NY State. That adds up very quickly.
Chris ************
Chris ************
Alice *****
Alice *****
Hi, I'm looking for advice from those US expats who changed their legal residence to a no income tax state prior to relocating to Thailand. I'm currently living in NY State and do not want to get hit with state tax on any future 401k withdrawals. Is there a recommended way to avoid this without physically moving to a non tax state? Thank you!
Dave *********
Dave *********
Just grab an address from any of the mail forwarding services, tell them that’s your new address, done. I chose one in Seattle. Gave it to the USPS for my mail forwarding address, changed all my bank addresses, VA and military pension addresses, no issues. 
Pete ******
Pete ******
OP
@Dave ********
Did you change driver's license?
Dave *********
Dave *********
@Pete *****
I did not. I have a Texas driver license, changed my physical address to Seattle because I have friends in Seattle, which gives me the option for local pick up if I need it.

But if you did want to get a license from another state, South Dakota has a special program just for ex-pats/nomads where you can arrive in South Dakota, arrange with a local mail forwarding service to get a physical address, then use that address to get your South Dakota drivers license and state residency. 
Dave *********
Dave *********
You can do it all in a day or two. 
Lon **************
Lon **************
I changed my address to Texas using an RV mail service that gives you a physical address you can use to apply for a Texas Driver’s license and obtain Texas residency.
Marty *********
Marty *********
I am from California. My retirement savings are in Fidelity. When I changed my address to my Thai address there were no CA tax withholding on all of my withdrawals. I stopped paying taxes in CA two years after moving to Thailand. CA has acknowledged that I am no longer a tax resident. I am not a tax resident in any state.
Matt *******
Matt *******
@Marty ********
Color me jealous. Because I still have property in CA, they still consider me a tax resident. Even though I've been in Thailand for almost two years now.
Mark *********
Mark *********
@Matt ******
just file a California return on the income. You're getting from that property and only play Calfornia tax on that income.
Marty *********
Marty *********
@Matt ******
Yes. You remain a tax resident because of the property.
Pete ******
Pete ******
OP
@Marty ********
Thank you. My understanding is that NY will consider you a resident until you prove otherwise. I need an auditable paper trail to prove I'm no longer a legal resident.
Marty *********
Marty *********
@Pete *****
CA noticed that I stopped paying taxes in 2019 and sent me a letter in 2023 saying they thought I owed them $6,000 in taxes. I sent them copies of my Thai drivers license, Thai ID, and a copy of my passport. They replied that they no longer considered me a tax resident. If you don’t live there you don’t owe taxes.
Ian *******
Ian *******
@Marty ********
fair enough, but personally I wouldn't bother. My drivers licence has worked for me.
Marty *********
Marty *********
@Ian ******
Also, at the time, my drivers license didn’t have my correct address. It helps to have a photo ID with your correct address.
Marty *********
Marty *********
@Ian ******
The pink ID worked for buying a motorbike. Lots of people think it is useless. Whatever. I was after the yellow book and the pink ID was immediately available so I got it.
Ian *******
Ian *******
@Marty ********
but your Thai Drivers Licence already serves as Id for situations like hotels, airlines (domestic), police traffic stops etc. It also has your passport number shown on it.
Marty *********
Marty *********
@Sean *********
I got a yellow house book in Sisaket province which can serve as a substitute for a foreigner residency certificate. Getting the yellow book was a bit of a process involving my Thai wife, her family, and the village headman. Once you get the yellow book you can, in the same office, get the Thai pink card which is what I am calling my Thai ID. It’s not exactly a substitute for your passport but it works in some situations like registering in a hotel or as an ID during police traffic stops.
Sean **********
Sean **********
@Marty ********
Thai ID? Does that mean you are a resident of Thailand. I am in Thailand on a retirement visa, wondering if that is enough
Marty *********
Marty *********
@Pete *****
CA has criteria they use to determine if you are a tax resident. Google the same for your state. Of course a tax lawyer will know.
Darren *********
Darren *********
You only have to go to South Dakota for a day to get residency and a driver's license.

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