topic Re: Remote Work CA/WA in State tax filing

Remote Work CA/WA

cree30 — Tue, 19 Oct 2021 18:16:57 GMT

I switched jobs and the new company is headquartered in California. I am working remote from the state of Washington (no state income tax). I do not need to be in CA to perform my work. Would I qualify for refunds of the CA taxes I am paying? How do I file for one?

Re: Remote Work CA/WA

TomD8 — Wed, 20 Oct 2021 15:18:53 GMT

If you are a resident of Washington and your remote work is entirely done from a Washington location, your W2 income from that work is not subject to CA taxation. If that's your situation no CA taxes should be withheld from your pay.

CA taxes non-residents only on CA-source income. W-2 earnings are "sourced" where the work is actually performed. In other words, CA taxes non-residents only on earnings from work actually (physically) done within the state of California.

Talk to your payroll department.

To obtain a refund of the incorrectly withheld CA taxes, at year's end file a non-resident CA tax return and allocate zero income to California.

Re: Remote Work CA/WA

Hal_Al — Mon, 25 Oct 2021 10:56:57 GMT

The above answer applies to regular W-2 employees. If you are a contract employee, receiving a form 1099-NEC, instead of a W-2, the answer is different. Due to a 2019 court ruling in CA, if you are a sole proprietor and you provide services to a client located in CA, that income is taxable by CA - even if you never set foot in California.

Reference: https://www.coblentzlaw.com/california-office-of-tax-appeals-gives-precedential-authority-to-bindley-decision-nonresident-sole-proprietors-out-of-state-services-to-california-customers-could-trigger-california-filing-requirem/