W is a resident of CA, H is a resident of NV, W receives a pension: Is H CA taxable on 50% of the pension on 540-NR as CA source; or is that 50% exempt under 4 US 114?

[jdeangelis]

W earned pension benefit exclusively from CA work and all is community property.  Alternatively, would CA require W to include 50% of H's pension payments in NV or would it too be exempt from CA tax under 4 USC 114?  Are pension payments different than CA wages which are allocated 50% to W and H as CA source income and are 100% taxable in CA.  Basically, are pension payments treated as CA sourced wages because of W's residency or are they treated as sourced to the two different states since H and W both have a 50% community property right in the pension?  I cannot find an answer to this.  Thank You.

[MarilynG1]

Generally, pension income is taxable in your Resident State, no matter what state you lived in when you earned it.  

H & W would not be filing a joint state return, as they are residents of different states. 

W would report 50% of H's pension income on their California return (community income). 

Since H's pension is not considered 'CA source income', they would not need to file a CA return, unless they have other California income to report. 

Here's more detailed info from CA FTB on RDP Filing Requirements. 

[jdeangelis]

Thank you.  The pension is paid to W in CA; H receives 50% in NV as community property; a joint 540-NR is required because H has CA source wages and H and W file a joint federal return.  Should be same result: 50% allocated to H and 50% to W; W is taxed in CA on 50% of pension, and H is not taxed in CA on his 50% community property share.