@user17568826280 ,
First , starting with the federal income
(a) As an US person ( GreenCard), she is taxed on world income, irrespective of source country. Thus all her income are part of her gross income for US tax purposes. Also to note is that any taxes paid to a foreign govt./taxing authority , may be eligible for foreign tax credit. Tax treaty conditions may apply as far as taxability of some foreign source incomes
(b) As a Non-Resident Alien, US taxes only his US sourced / connected income. Thus his foreign income is NOT subject to US taxes. This is ,of course, unless both husband and wife agree for the husband to be treated as resident for tax purposes ( his world income then comes under the ambit of US taxes) and thus MFJ status.
Second, for California purposes ( and noting that generally states tax income based on residency and/or connection to the state)
(c) Since she is a resident of CA, her income would flow from the federal return and generally is worldwide income ( residency based ). And since she is filing as Married filing separate / essentially "single" 100% of her income is taxed in California --- you cannot allocate when the person has no existence/connection to the state.
(d) Absent an agreement to be taxed as a resident, his income is outside the ambit of California taxation
Does this make sense ? Is there more I can do for you ?
