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vedhan
Returning Member

Filing CA state tax

I have applied for extension for year 2020. I bought Turbotax premier and my situation is this.

 

I was working in a CA based company for last few years until August 2020. My company moved my job to CO upon my request from september 2020. I found a place a to move in CO and changed my voter and license to CO in october 2020. But I could not continue staying there because of covid spread. I have two W2, one for period Jan-Aug(CA) and another from Sep-Dec (CO).  I'm confused whether to following things any help is appreciated:

1. Do CA considers that the income from  August till december as CA sourced because I could not physically live there ?

2.  Will Executive Order N-33-20 have an impact on my filing for CA source of income? Meaning because of the order can I file CO state tax starting August 2020.  

3 Replies

Filing CA state tax

Part-year and nonresidents of California are subject to income tax on "services performed for wages" while physically present in California. I do not understand: "But I could not continue staying there [Colorado] because of covid spread."

 

From your W-2, it appears you lived and worked in California from January to August 2020 and lived and worked in Colorado from September to December 2020. In that case you should file a part-year California and a part-year Colorado income tax return.

 

Executive Order N-33-20 does not impact your CA source income unless you moved back to CA in 2020. In that case, as above, any income earned in CA is taxable to CA. See Teleworking and the “Stay at Home” order in COVID-19 frequently asked questions for tax relief and assistance

vedhan
Returning Member

Filing CA state tax

Yes, I moved back from CO to CA. What should I do in that case

TomD8
Level 15

Filing CA state tax

If your August move to CO was intended to be permanent (and it sounds like it was since you changed your drivers license and voters registration), then you would file a part-year resident tax return in each of the two states as @SundayInSalem described.  CA can tax the income you earned as a resident of CA; CO can tax the income you earned as a resident of CO.

 

But if the move was intended to be temporary or transient, and you did not abandon your domicile in CA while living in CO, then you would file a non-resident return in CO and a resident return in CA.  In that situation CO could tax the income you earned by working in CO, and CA could tax ALL your income, including what you earned in CO.   But CA would let you take a credit for the taxes paid to CO.

 

You'll find CA's detailed rules on residency in this reference:

https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf

 

In particular, you should read "Change of Domicile" on page 10.

 

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