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Level 2

Question

Are bonuses taxed by the state where I lived when the original work was performed, or in the state where I lived when it was paid?

Forum|Forum|4 years ago
January 26, 2022
2 replies
0 views

Lived in CA for the first 2 months of 2020 and in Michigan for 10 last months. Bonus for 2020 was paid in 2021. Employer treated the bonus as part CA income and part MI income, even though I lived in Michigan for ALL of 2021.

TurboTax Premier Online

Level 15

Your California bonus pay is taxable to both California (that's where you earned it) and to Michigan (that's where you received it).

California says "Sick leave, vacation pay, and bonuses earned by a nonresident for services performed in California are considered California source income. See the Appeal of Edwin O. and Wanda L. Stevens, 86-SBE-100, May 6, 1986."

See 3440 Sick Leave, Vacation Pay, Bonuses, and Severance Pay in California's Residency and Sourcing Technical Manual

Michigan residents are taxed on all income received while a MI resident.

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Level 2

Isn't that double-taxation if I owe CA and MI for the same income? How can that be right?

Level 15

did you work either remotely for the company from MI or from a MI location for the same company?

if not, it would seem the entire bonus was earned for the 2 months you worked in CA and should have been reported as such.

Mike9241

Level 2

Yes, worked for the same company for the whole year: 2 months in CA and 10 months in MI.