Hello,
I am active duty and I am stationed in PA. My wife and I have been legally married for a number of years. We are both residents of PA. My wife took a job working remotely for a company based in CA. Under CA law she received "...income for services which benefited a business or individual in California..." so we would have to file a non-resident return. Her employer did not withhold any state taxes. We made estimated tax payments to PA throughout the year to cover the income she received.
Am I correct that we are not covered under the MSRRA because we don't meet the provision, "The spouse is in California solely to live with the servicemember" since she is working there remotely?
Therefore, her income is taxable in CA and we report all the income she received from that company to CA and pay taxes on it less the credit from the tax we already paid for that income to PA?
