FL self employed to non-resident CA w2

[jpscriv]

Good Evening! I certainly hope I'm posting in the right place.

My wife and I live in Florida. We've always filed jointly and I've been freelance while she's been a school teacher. This year I took a remote job based in California. I did as I always did in years past with a w2 and put 0 dependents for max taxes taken.

At first, I didn't realize I'd have to pay CA state tax. Currently 25% of my paycheck is being withheld (no insurance). 

I've been using turbotax for a few years now. I know it will inquire and assist with some of this but also wanted some human input.

My questions are:

Should I file separate of my wife in April?

Should I change my i9 dependent total?

Thank you for your assistance!

[Critter-3]

If you live and work in FL as a waged employee and will get a W-2 issued then you do NOT file a CA return so you should not have CA taxes withheld.  Did you fill in a W-4 form when you started ?  Are they withholding FICA taxes + fed + state withholding ? 

Or are you a sub contractor who will get a 1099-NEC at the end of the year ?  Did the client have you fill in a W-9 form when you started ?  Are they just withholding a flat federal 25% ?

[jpscriv]

Good Morning @Critter-3 ! 

Thank you for your response. Yes,I filled out a W4 and both fed and state taxes are being withheld. It's been 10 years since I've been a company employee due to being freelance, so whether or not it was the best idea, I filled it out at zero dependents. This was to be safe and cover us next year because it put us in a higher tax bracket.

I'm a salaried W2 employee and each paycheck there's 11% coming out for federal, 6% for SS, 1% for MC, 5% for CA state income, and .01% for CA state disability insurance.

I see opposing thoughts and ideas on here about this kind of thing. I'll never go there for work and always log in remote. It's a marketing, motion graphics, web design, etc. position. People on here have mentioned some form to get the money back, it seems?

If I don't need to file CA, then it makes sense to do as always, and file jointly under self-employed once more since most of my year was freelance. But if I have to file CA, should I do that separate?

I've grown accustomed to 20 years of no state taxes in FL 🙂 

I'm decent at math, but tax math... ugh!

I hope this help. Again, I appreciate your assistance.

scriv.

[Critter-3 · Accepted solution]

You are not not not required to file a California return because you are a Florida resident and you do not live or work in California. Since you are an employee tell the employer to stop withholding the state taxes it is not required. If they will not refund you all the state withholding they have already withheld then you will need to file a non-resident California return in order to get a refund of those withheld taxes.

[jpscriv]

Gotcha!

And again, thank you for your prompt responses!

[NCperson]

@jpscriv - just to be clear, you are a W-2 employee of this firm, right?  then there is no state income tax payab le to CA, but if you were earning that money as a contractor (1099-NEC) of a CA based firm, it is taxable......

at this point, since your employer is withholding, you will have to file a CA tax return in April for the sole purpose of getting back the money withheld. .

[jpscriv]

That is correct. I'm W2. Since we spoke last, there's another employee in Las Vegas who has confirmed he's not having any CA tax removed from his paycheck. The company is small, roughly 15-20 people, so they run payroll through ADP. They are still learning when it comes to out-of-state workers.

They originally started me as an hourly/clock-in employee, but quickly found out that, because of the time difference, I was working into what California considers overtime evening hours. On my first week I didn't even have 40 hours, but 15% of them were paid out as overtime due to these rules. I hate having to clock in so I convinced them to put me on salary.

In addition, the time off plan is horrible. It's earned PTO, but only 1.5 days after the first year. I didn't find this out until after I was hired. They insisted it was in place because of CA law that said you have to pay accrued hours to people even when they only work there a few months and quit. They're telling me they'll be very lenient with off-book time off when I need it, so I'll have to wait and see.

It's better to have work than none at all, and in my field, it's very hit or miss.

Thanks for looking out @NCperson!