topic Rental Income in CA and living in NC in Get your taxes done using TurboTax

Rental Income in CA and living in NC

44876 — Wed, 31 Aug 2022 15:03:58 GMT

I live in NC but may soon receive rental income from a property located in CA. Do I have to pay any taxes on the rental income produced in CA even though I do not live there?

Re: Rental Income in CA and living in NC

Anonymous_ — Wed, 31 Aug 2022 16:00:54 GMT

@44876 wrote:

Do I have to pay any taxes on the rental income produced in CA even though I do not live there?

Yes, because you have California source income.

See https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.html

Re: Rental Income in CA and living in NC

44876 — Wed, 31 Aug 2022 16:22:37 GMT

I live in NC not CA. Do I have to pay any income tax to CA or just NC? Hopefully not both?

Re: Rental Income in CA and living in NC

TomD8 — Wed, 31 Aug 2022 20:43:11 GMT

Your rental income is taxable by both states. Rental income from a property located in CA is taxable by CA. ALL your income (including the CA rental income) is taxable by NC because your state of residence can tax all your income regardless of its source.

The good news is that you'll be able to claim a credit on your NC return for the tax you pay to CA, so you won't be double-taxed on the rental income.

But you must file two state returns: a non-resident CA return plus your home state NC return.

When you do your taxes In TurboTax, be sure to complete the non-resident CA return first, before you do your NC return, so that the program can calculate and apply the credit correctly.