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lamtk18
Returning Member

How do I get TurboTax to select Part-Year Resident on my California return (Sch CA(540NR))?

After being California residents for the past few years (and filing federal and state taxes each year), my spouse and I moved to a foreign country in May 2024.

 

On the "Residency Information During 2024" screen, I answered the following:

 

Did you become a California resident during 2024? - No.

Did you become a California nonresident during 2024? - Yes.

Were you a California nonresident during all of 2024? - No.

 

As I complete the rest of the state return and proceed to State Review, TurboTax finds an error and asks me to enter the 2-letter code for Line 5 "I was a CA nonresident the entire year (enter state of residence)". I planned on just leaving it blank and proceeding to file but when I reviewed the form in its entirety, I noticed that TurboTax had checked "Nonresident" on Line 1 instead of "Part-Year Resident" and left Line 4 ("I became a California nonresident) blank.

 

I also did not get any prompts relating to my "Date of move" while completing the return.

 

Am I answering the questions wrong?

How do I get the Sch CA(540NR) form to reflect "Part-Year Resident"?

Has anyone else encountered this issue before?

 

Not sure if relevant but I specified "FC (Foreign Country)" on the state/country of domicile question.

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1 Reply
DavidD66
Expert Alumni

How do I get TurboTax to select Part-Year Resident on my California return (Sch CA(540NR))?

You need to make sure you are no longer considered a California resident before you file as part-year resident.  Moving to a foreign country is not enough by itself to terminate your California residency.  The California Franchise Tax Board assumes that California residents that move overseas are leaving for temporary purposes, not to change their residency status.  This is especially the case if you keep significant contacts which indicate an intent to return, at least in the eyes of the FTB. This includes bank accounts, a driver’s license, real property.  Selling your home or terminating your lease in California is not enough to terminate your California residency.  

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