CALIFORNIA - TAXING on IRA for NON RESIDENT

[ammason]

CALIFORNIA - TAXING on IRA for NON RESIDENT (PERSON IMMIGRATED PERMANENTLY OVERSEAS)

Turbotax shows an option on personal information to record that a taxpayer actually lives in a Foreign Country.  A taxpayer who then receives an IRA that is taxable at Federal level, is automatically fed across into a State (which is forced to be used) as when entering IRA at Federal level the withholding tax that is deducted at source and reported by default. Technically no state (specifically in this case CA) can tax an IRA received by a nonresident (permanent overseas resident). Turbo Tax should automatically EXCLUDE the IRA amount. It does not) and also any income received overseas cannot be shown as such and is automatically taxed.  There are also no check (validations in the online turbo tax section - California Adjustments —
Nonresidents or Part-Year Residents)

[TomD8]

If CA income tax was incorrectly withheld from your IRA distribution, then you can obtain a refund by filing a non-resident CA tax return on which you enter the distribution amount as a subtraction on line 4b, Column B of Schedule CA (540NR).

https://www.ftb.ca.gov/forms/2023/2023-540nr-ca.pdf