State tax filing

Great thread! I'm in the same situation as OP, except multiple CPAs have not been as confident that it will be so straightforward for me to reclaim CA state taxes back from the part of the year we moved domicile from CA to WA.

Some background:

- I relocated myself and my family from CA to WA in mid-August 2020.

- My husband and I registered to vote in WA, registered our car in WA, got WA drivers licenses

- We removed the renters from the home I owned all along in WA and we moved into that home.

- We ended our apartment lease in CA. We have no family or property ties to CA.

- My employer is based in CA and continues to take CA taxes out of every paycheck.

- My employer permitted employees to relocate during Covid, but did not permit employees to update their home address in our HR system for taxation purposes, citing that any relocation should be considered temporary.

- However, I'm not expected to go back to the CA office until September 2021, and this can be extended.

- My husband and I never intended to go back to CA, despite what my employer says about relocations being temporary.

Consequently, per the 2020 California FTB 1031 Publication (https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf) we appear to meet the CA FTB definition of having changed our domicile due to:

• Abandonment of prior domicile
• Physically moving to and residing in the new locality
• Intent to remain in the new locality permanently or indefinitely as demonstrated by our actions

Per the same publication, it appears we would be a "part-year resident" of CA for 2020 tax purposes (i.e. California residents from January 2020 - first half of August 2020, and nonresidents from second half of August 2020 to December 2020).

The publication mentions that "only income from California sources is taxable by California." It goes on to state:

"Wages and salaries have a source where the services are performed. Neither the location of the employer, where the payment is issued, nor your location when you receive payment affect the source of this income."

From the above information, and the exchange within this thread, it seems clear that we should expect to receive a refund for the taxes we paid to California while living and working from our WA home.

**However, multiple CPAs have noted to us that since my employer has been reporting that I've been paying CA taxes the entire year since my employer claims I am based in CA (even though that's not entirely true since the services I performed were from my home in WA for part of the year - and to this day we are still WFH in WA) - the state of California will be expecting taxes paid commensurate with this income for the full year. So, when we go to claim those taxes back, there's going to be a large discrepancy between what my employer reported and what we claimed.

The CPAs said this would surely trigger interest from the FTB, and we should expect this to drag out in an exchange of letters from the FTB asking for more information, possibly resulting in an audit.

The CPAs said we are within our right to reclaim the portion of CA taxes back since the time we left CA, but they seemed very hesitant to encourage this, and warned that we'd be up against my large and powerful employer here. They said we should get my employer to adjust my W2 to reflect when we moved to WA. My employer has stated in a company-wide FAQ that they will refuse to adjust W2s for any employees due to moves such as ours.

My questions:

1) I get that having my employer adjust my W2 to reflect that I now reside in WA, and convincing my employer to allow me to update my home address in our HR system which is used for taxation purposes would be ideal, however, is this absolutely necessary or is it more of a "nice to have?"

2) I don't see anything about an employer having any say in this matter with regard to me reclaiming back a portion of my taxes, so I'm not sure what I am missing which makes some CPAs hesitant when I mention reclaiming a portion of the CA taxes paid. Anything I overlooked?

3) What happens from the perspective of my employer? Will they know I filed trying to reclaim some of the CA taxes paid? Does it affect the CA taxes they paid?

Any and all advice is much, much appreciated!