Generally, where you perform the work for which you are compensated controls which state has the right to tax your income. Your resident state will always tax your income (unless you live in a state without an income tax) and may also provide a credit for taxes paid to a non-resident state for income taxed by the non-resident state.
If you perform services for a client in California, you may owe tax on the compensation you receive from the client even though all of the work you performed was done outside of California. Here is a FAQ from the CA Franchise Tax Board that addresses the issue you have raised.
Scenario 4:
You are an independent contractor/sole proprietor who relocates to another state. In addition to obtaining customers in your new state, you still perform services for California customers who receive the benefit of your services in California. Will you need to file a California return?
Answer: Yes.
California source income for independent contractors/sole proprietors is determined by looking to where the benefit of the service is received by the customer. The location where the independent contractor/sole proprietor performs the work is not a factor. Visit Market-based sourcing for independent contractors for more information.
CA Franchise Tax Board
@Michael16
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
