Hi MaryK1101!
Would appreciate if you could help me with a similar question I have.
Suppose person has annual salary of $60,000. They live 5 months in California and then move to Washington for the rest of the year. AFTER moving to WA, they make a maximum allowed ($19,500) 401(k) contribution.
Now what they have in W2:
– Federal taxable income is $60,000 – $19,500 = $40,500.
– California taxable income is full $25,000 (5 months).
1) Is it all correct? California would not take into account 401(k), which were made after moving to a different state?
2) Does it mean that only if the person maxed out 401(k) contributions while still in California, their taxable CA income would be $25,000 – $19,500 = $5,500, and the person would benefit not only from Federal deduction, but from the state deduction as well?
Thank you so much!
