@drheidi your NY employer should be taxing you as a nonresident of NY. You will owe taxes to NY as you are working remotely for a NY based business. New York is one of a handful of states that has a “convenience of employer” rule, meaning workers must pay income tax to New York if their employer is based in the state, even if their job was done remotely. Nonresidents of NY only pay taxes to New York on New York-sourced income
Your employer should withhold taxes for CA especially as they are liable for UI, ETT, SDI, and PIT depending on if they have business there. It could get messy if you ever have to file for unemployment as your work is being done out of CA and you are in CA more than 50% of the time . Employers also have a responsibility to withhold taxes for the state in which the employee works and your place of work will be CA. CA is one of the few states who have no reciprocal tax agreements. Employers conducting business in California are required to register with and file reports and pay taxes to EDD. https://www.taxes.ca.gov/Payroll_Tax/doingbus1.html If they do, no problem have them withhold. If they don't you will have to pay estimated taxes to CA.As you are a resident of CA, you owe taxes as if all income was earned in CA. Generally, residents of California (with the exception of dual-resident estates and trusts) may claim a credit for net income taxes imposed by and paid to another state only on income which has a source within the other state. in your case NY sourced.
You should talk to your employer as there are a number of intricacies to CA FTB liabilities. They should start withholding for CA. If they won't withhold taxes, make sure to file estimated taxes utilizing TT. You may want to update it if you had bonuses or any other income sources as you don't want to have CA tax penalties for failure to pay timely.
Next year when you file first you will do your Federal return, then your non-resident NY State for the remote work and you will have to allocate other types of income such as dividends and interest out during the NY interview, and third your CA resident state which will credit you for double taxed income at lowest state rate.
**I don't work for TT. Just trying to help. All the best.
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**Mark the post that answers your question by clicking on "Mark as Best Answer" I am NOT an expert and you should confirm with a tax expert.
