You are correct. If the state tax withholding was paid to California (CA) by your employer and you did not work there in 2020, you must file a return to obtain a full refund. You will indicate you were a nonresident and you should put zero earnings in CA on the W-2 in the federal section of TurboTax, but make sure to put the withholdings for CA.
For clarification, there are two potential actions.
- if the W-2c shows no CA state withholding then no return is required and any tax withheld must be reimbursed by your employer.
- If the W-2c shows no CA taxable income (as you noted), but the CA state tax withholding is still present, then you must follow the instruction above and file the CA return to obtain the refund because this is where your employer paid the tax.
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