I am a nonresident of CA, and provide telehealth to clients in CA. Is this income "sourced in CA"? My office and all work is performed in NC, but patients in CA

[lordiford]

My HR says it is not taxable by CA, but Franchise Tax only says "sourced in CA" without clarifying remote telehealth.

[Bsch4477]

• If an employee is a nonresident of California and works remotely from another state, California may still be able to tax the income if the employee performs services for an employer in California.

[lordiford]

If anyone else has the question, I talked to the Franchise Tax Board today. After going up the chain of command (the original staff couldn't answer this question), the final response was NO- if you work entirely remotely and your work is performed remotely (eg telehealth) you do not need to file a tax return in CA. This does not include services such as speaking engagements within CA. To clarify: my employer is in CA, they have a brick and mortar office in CA. But I provide telehealth and do not reside within CA. FTB and I decided my work was "online" and not sourced "within California." 

[Hal_Al]

If you are a W-2 employee and all your work is actually (physically) performed in your state of residency and you never physically work in CA, then you would have NO "CA sourced income".  This is true even if you work for a California based employer.

In  California that rule does not apply to the self employed.   Due to a 2019 court ruling in CA, if you are a sole proprietor and you provide services to a client located in CA, that income is taxable by CA - even if you never set foot in California.

[Bsch4477]

https://ota.ca.gov/wp-content/uploads/sites/54/2020/01/18032402_Bindley_Decision_OTA_Revised_012420S...