CA part year resident

Forum|Forum|6 years ago
June 13, 2020
3 replies
59 views

My daughter returned to California after living abroad for 5 years. No income has been earned since returning to the US, yet when Turbo Tax enters the foreign earned income into the state form, it comes out that state taxes are due on it. There are no taxes due on the federal form as it is all foreign income exclusion. How do I get the 540NR form to recognize that there is no California income?

Best answer by TomD8

The question in your daughter's case is whether or not she became a non-resident of California during her absence from the state. If she did, and if she earned no 2019 income after her return to the U.S., she would have no obligation to file a 2019 CA tax return.

CA's rules on determining residency are complex, and you'll have to interpret them for yourself. The rules are detailed in CA Publication 1031. Here's a link to that:

https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf

Bsch4477

Level 15

See if this helps.

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/does-california-accept-the-foreign-earned-income-exclusion/00/385154/amp

kzblewski11Author

Level 2

yeah, I saw that before, and it says:

"As a part-year resident, you pay tax on:

All worldwide income received while a California resident
Income from California sources while you were a nonresident"

There has been no income while a California resident and there was no income from California sources while a nonresident.

But... the forms are still taking the nonresident foreign income and taxing it (taxes were paid on it in the foreign country)

TomD8

Answer

Alumni - Champ

CA's rules on determining residency are complex, and you'll have to interpret them for yourself. The rules are detailed in CA Publication 1031. Here's a link to that:

https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.