TomD8
Level 15

State tax filing

1.  You definitely pay state income tax to CA.  CA can tax its residents on ALL their income, regardless of where it's earned.  So you definitely want your employer to withhold for CA.

 

2.  With regard to PA, the answer is "it depends."  If you are required by your employer to work remotely from out of state, your income from that work is not taxable by PA.  But if you are working remotely for your own convenience, the income is taxable by PA. 

 https://www.revenue.pa.gov/COVID19/Telework/Pages/default.aspx

 

3.  If your income is taxable by PA, you'll have to file in both states.  But you would be able to claim a credit on your CA return for the taxes paid to PA.  However, since PA's tax rate is much lower than CA's, it is very unlikely that the credit would offset your entire CA tax obligation.  So in that situation you'd want your employer to withhold for both states.

 

4.  PA did have a special Covid rule.  If you were working in PA prior to the pandemic, and then switched to remote work due to the pandemic, that remote income would be taxable by PA.  This rule expired June 30, 2021.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

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