CA taxes being withheld but I work remotely in GA - can I get CA tax refund ?

[nkarthikpsg]

Hi, I started to work remotely from GA for a CA based company from 2021 April. Somehow I missed changing the residence state and my employer has been withholding CA tax till now. I am planning to move to CA in Nov. Can I get the CA taxes refunded as I never resided in CA ? Is it illegal to not withhold GA tax as I reside in GA ?

Thanks,

[SundayInSalem]

No can probably cannot get your California state tax withholding refunded from you employer. They usually are not able to do that. But speak with them just in case. 

You should file a DE 4 with your employer to stop California withholding until you move to the Golden State in November and a G-4 to start GA income tax withholding.

A California nonresident will only pay state income tax on income earned while present in CA. See "Residency and income sourcing" in COVID-19 frequently asked questions for tax relief and assistance.

Georgia

Not withholding Georgia tax is not illegal since you did not file the required paperwork with your employer to have tax withheld. As a GA resident, you are liable for GA tax on all your income, regardless of where it was earned until you move to CA.  The longer you go without GA income tax being withheld, the more you will owe next year. You can make an estimated tax payment if you wish to make up for the missing withholding.

[nkarthikpsg]

Thanks for the reply. I will make the change to withhold GA tax.

If the employer is not able to refund the already paid CA tax, is it possible to get the tax refunded during the next year tax return ? I am not concerned about the timing of the refund as long as I get it.

[SundayInSalem]

Hi nkarthikpsg. If your employer is not able to refund the tax, you will file a nonresident California income tax return next year and report $0 California income. Your W-2 will have a different amount. That's OK. It's usually best to file the state return by mail in those cases so you can include an explanation. You'll still be able to e-file Federal and GA.