I took my first withdrawal this year from my Rollover IRA. I paid both Fed and CA taxes. I am currently living overseas for the past 2 years. I was told told that I did not have to pay state taxes to CA. Is this true? I was concerned because it is CA, state taxes are based on the state you earned the money invested in the IRA.
If it is true, how do I get my payment back?
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Your question has two components to it as you are introducing living overseas and receiving a pension.
If you are considered a California resident is addressed under 2020 Publication 1031 Guidelines for Determining Resident Status look on page 4 under item D section titled Safe Harbor. This may be relevant if you are out of California for 546 consecutive days and there is an income limit and a purpose and a certain number of days you can be in the state due to temporary visits.
CA Reference: https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf
The other document that needs to be consulted is the 2020 FTB Publication 1005 Pension and Annuity Guidelines. Look on page 6 and 7 of the guide to determine if you qualify as a non-resident and if you have a basis in your IRA which is maintained at the Federal Level on an IRS form 8606. Other forms of pension such as those listed on page 5 such as some 401K's are treated differently for non-residents.
CA 2020 Reference: https://www.ftb.ca.gov/forms/2020/2020-1005-publication.pdf
In the case, that you do meet the above qualifications, please file an AMENDED tax return to the State of California and indicate that you incorrectly marked yourself as a resident and make the appropriate changes if you meet the qualifications and file that with the Franchise Tax Board. The Franchise Tax Board will then refund your money based on your specific situation.
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