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kev6d
New Member

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

 
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DanielV01
Expert Alumni

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

You have one of the more unique state taxation situations, because CA and VA have what is known as a reverse reciprocal agreement.  Your Federal return is not affected by this situation; your Federal return will be filed using normal credits and deductions that would apply to your Federal return.  However, here's how you will file the state returns:

You are a resident of California and a nonresident of Virginia.  (If you were maintaining a residence in Virginia, you would be considered a statutory resident of Virginia if you resided in and maintained a residence and had a physical presence in Virginia for 183 days.  Since you did not maintain a residence in VA, but rather your employer did, you are a nonresident of Virginia).  

In the majority of cases, the nonresident state will get the priority in taxation.  You pay taxes where you are working, and then your resident state (California) will give you a credit for the income tax you pay to Virginia on this income.  However, Virginia and California does it the opposite way:  California taxes all of your income, and Virginia will give you a credit for the tax you pay to California on the income you earn in Virginia.  Click on this link for Virginia:  Credit for Taxes Paid to Another State | Virginia Tax and click on the Nonresidents tab for a description of this credit

Because of this credit, you will complete your California return first in TurboTax.  Then, when you prepare your Virginia return, TurboTax will calculate the Virginia credit for the tax you must pay to California on this income.

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DanielV01
Expert Alumni

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

What is the other state and how long is the assignment there?  Are you maintaining a residence while you are there?
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DanielV01
Expert Alumni

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

Also, are you married filing a joint return, and, if so, what is your spouse's situation?
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kev6d
New Member

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

The other state is VA. I live in temporary quarters that are paid for by my employer. I am not married.
kev6d
New Member

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

The response was very helpful. May I ask a clarification question? How should I ensure this is appropriately captured/represented in TurboTax? Do I have to state that I "earned" money in VA, but do not claim to be a "resident"?
DanielV01
Expert Alumni

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

When you select NONRESIDENT return for VA, that is the choice that describes your situation.
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kev6d
New Member

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

Disregard question.
DanielV01
Expert Alumni

I am a federal employee. I am a CA resident and earn wages there. However I am on a long term assignment in another state. How do I reflect that in my tax returns?

You have one of the more unique state taxation situations, because CA and VA have what is known as a reverse reciprocal agreement.  Your Federal return is not affected by this situation; your Federal return will be filed using normal credits and deductions that would apply to your Federal return.  However, here's how you will file the state returns:

You are a resident of California and a nonresident of Virginia.  (If you were maintaining a residence in Virginia, you would be considered a statutory resident of Virginia if you resided in and maintained a residence and had a physical presence in Virginia for 183 days.  Since you did not maintain a residence in VA, but rather your employer did, you are a nonresident of Virginia).  

In the majority of cases, the nonresident state will get the priority in taxation.  You pay taxes where you are working, and then your resident state (California) will give you a credit for the income tax you pay to Virginia on this income.  However, Virginia and California does it the opposite way:  California taxes all of your income, and Virginia will give you a credit for the tax you pay to California on the income you earn in Virginia.  Click on this link for Virginia:  Credit for Taxes Paid to Another State | Virginia Tax and click on the Nonresidents tab for a description of this credit

Because of this credit, you will complete your California return first in TurboTax.  Then, when you prepare your Virginia return, TurboTax will calculate the Virginia credit for the tax you must pay to California on this income.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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