ErnieS0
Expert Alumni

State tax filing

Yes. You can do a similar allocation for California income tax purposes.

 

California says:

 

If you are a nonresident of California on the date the stock vests, the character of the income attributable to the vesting is compensation for services rendered. California will tax the income to the extent you performed services in this state.

All Service Performed Within California


If you perform services for a corporation entirely within California but the stock vests after you terminate employment and become a nonresident, the income attributable to the difference between the fair market value of the stock on the vesting date and the price you paid for the stock has a source in California, the location where you performed the services.

 

Example 2

On February 1, 2011, while a California resident, you purchase stock from your employer that was subject to substantial risk of forfeiture for a 3 year period. You performed all of your services in California from February 1, 2011, to December 31, 2013, the date you left the company and permanently moved to Wyoming. On February 1, 2014, your stock vested.

 

Determination:

The difference between the fair market value of the stock on February 1, 2014, and the price you paid for the restricted stock on February 1, 2011, is characterized as compensation for services having a source in California, the state where you performed all of your services.

 

Equity-Based Compensation Guidelines

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