@MarilynG1 ,
I didn't live in CA in 2021, and I didn't earn any "regular" wage in CA in 2021 either.
But in 2021 I exercised my stock options which had been granted to me in 2019 when I had been CA resident.
According to this publication https://www.ftb.ca.gov/forms/misc/1004.html , the part of stock options exercise income is taxable by CA:
The allocation ratio is:
California workdays from grant date to exercise date ÷ Total workdays from grant date to exercise date
Income taxable by California = Total stock option income × allocation ratio
Hence, my W2 contains in boxes 16-17:
- OR: my whole 2021 income (salary + stock options exercise) with appropriate taxes
- CA: Income taxable by California (according to above formula) with appropriate taxes
As I understand my employer, they have taxed me according to all possible laws, but now it's up to me to avoid double taxation by getting tax credit according to laws of these two particular states.
So, it seems I do have "income taxable by California" - but it shouldn't be eventually taxed, only because OR taxed it too (but if I exercised options as resident of "no-income-tax" WA, CA would eventually tax me).
Now my W2 is the only source of CA taxes for which I want to get credit.
- If W2 is corrected to have 0 (zero) as CA income (box 16) as you say, then what happens with CA tax (box 17)?
- If it becomes 0 (zero) too, then what should I request my credit for?
