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Is my 401K distribution taxable in California as a non resident when I did not have any income in California? My husband worked in California and a 401K distribution.

My husband has earned income in California and a 401K distribution.  We both live in Arizona.  I had a 401K distribution from my Arizona employer as well.  Are both considered taxable income for the Non resident California tax return?

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Employee Tax Expert

Is my 401K distribution taxable in California as a non resident when I did not have any income in California? My husband worked in California and a 401K distribution.

No, as a nonresident, California can ONLY tax state source income.  Retirement income is taxable only to the state if residence of the recipient, regardless of where it was earned.  However, California uses the federal income to determine the tax rate then applies it to the CA income only.

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