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Level 2
posted Apr 5, 2023 7:04:21 PM

California resident working remotely for an NJ Co.

Everyone:

I reside in California, and I remotely logon everyday for a company that resides in New Jersey. Facts: 

1. My company is only incorporated in NJ for tax purposes (and not California).

2. My NJ company has deducted NJ state income tax from my payment check.

3. For California filing, Form 540, my turbotax is showing a big fat error because, NJ has declared more than double tax than California, which is zero. 

4. How do I fix this problem on Turbotax? Did I do something wrong?

Thank you in advance,

 CaNj

 

 

0 2 1044
2 Replies
Expert Alumni
Apr 6, 2023 7:33:59 AM

Your employer should not withhold any NJ tax from your pay. You live and work in California, so your income is taxable on your California resident tax return. It doesn't matter if the company is in NJ. What matters is where you work, and where you live.

You need to file Non-resident NJ return to receive a refund for taxes withheld. All your income is taxable on CA resident return. 

 

Make sure you've filled out the Personal Info section correctly:

  1. With your return open, select My Info in the left-hand menu.
  2. Then, on the Personal info summary screen, scroll down to Other State Income, and select Edit.
  3. At the Did you make money in any other states? question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
  4. Select Continue to return to your Personal info summary.

To ensure accurate calculations, always complete the non-resident return first.

For more information check: How do I file a nonresident state return?

 

 

Level 15
Apr 6, 2023 9:00:57 AM

Two more things:

 

1)  Be sure to allocate zero income to NJ on the non-resident NJ return.  Your income is 100% taxable by your home state of CA.

2)  If your employer does not withhold CA taxes from your pay, you must make quarterly estimated tax payments to CA.  See this:

https://www.ftb.ca.gov/pay/estimated-tax-payments.html