What state tax to file? Live in Texas, work for California company, and travel for work to CA and other states

[Andy_W]

Hi, I will be moving to Texas but continue to work for same company in California.  I will travel back to California for work and also visit customers in other states.  Questions:

1) Do I file Texas or CA state income tax return?  I have to live in Texas for 6-months before becoming a Texas residence.

2) Is my home office in TX tax-deductible since company has no office in Texas?

3) If work travel expenses not reimbursed by company, can I deduct them for tax?

[PatriciaV]

1) If you consider Texas to be your permanent home, then you would not need to file a Texas tax return because Texas has no state income tax. However, if you have income that is sourced in California, you will need to file a California income tax return. 

2) It depends. If you are an employee of the California company, you cannot claim a home office deduction. If you are a contractor for the company, though, you may be able to claim a deduction for the business use of your home.

3) Again, if you are an employee and you incur travel required by the company that is not reimbursed, you cannot deduct those expenses. As a contractor, some travel expenses may be deductible. See IRS Tax Topic 511 - Business Travel Expenses for a discussion of what is deductible for someone who has two places of business.

[Andy_W]

So if I'm a Texas resident (TX is permanent home) but I work for a company in California, then I still have to file CA state income tax return for the salary from the company in CA?

How is whether the company is in California or Texas defined?  My company has offices in Texas, too, but HQ and my manager is in CA.  

[DawnC]

Yes, you would file a nonresident CA tax return and include only the income from days you work in the state of CA.   It doesn't matter where the company HQ are located, it only matters where you do the work.   If you work in CA, that income is considered California sourced income.   Example:  If you were to go to Kentucky and work there for a week, those earnings for that week would be KY sourced income.  

If you are a w-2 employee, you can't claim a home office deduction.  Only the self-employed can claim that deduction.