State Tax Filing

Forum|Forum|3 years ago
November 16, 2022
2 replies
19 views

My wife and I live in California. For 2022, my wife has worked from home as a graduate assistant for a university based in Louisiana. The university takes out Louisiana State Taxes from her paycheck. When filing taxes in the past, we have always filed jointly for both federal and state (California). Since only Louisiana taxes are now being taken out of her paycheck, does she still need to file with California in addition to Louisiana? For filing with Louisiana, does it make more sense for her to file separately rather than jointly since all of my state tax is California only? Please advise.

vfellows

Level 5

Per guidelines issued by the California Franchise Tax Board, all sources of income regardless of where earned “in the form of money, goods, property, and services” is subject to state income taxes unless exempted.

vfellows

Level 5

In most states, residents pay tax on the income (from all sources) they received during the calendar year. Residents typically get a tax credit for taxes paid to any other state.

Example: A California resident receives $20,000 from a rental building in Arkansas. The resident reports only the $20,000 to Arkansas and pays $2,000 in tax to Arkansas. Since the person is a California resident, California also taxes the $20,000, but gives a $2,000 tax credit for the tax you paid to Arkansas.

Part-year residents follow each state's rules. Some states separate the income, and tax only their state's income. Or a state may calculate the tax on all of the income as if you were a resident, and then allocate the tax based on in state sources as a percentage of all sources.