I have questions regarding state tax when moveing from CA To WA.
If I have worked physically in CA till May 31, 2020 and moved to WA in June 1, 2020
I started taking days off for two months by using vacation time accrued from June 1 2020.
Then, resign and cash out all my remaining vacation time after two months vacation.
then, selling house in CA after moving to WA.
Where do I pay state tax of items below in this situation ?
#1. Income till 05/31/2020
#2. Income during two months Vacation
#3. Income from cashing out vacation time
#4. tax regarding selling house in CA
I appreciate your answer, in advance.
1) ALL your income while still a CA resident is taxable by CA.
2) For tax purposes, CA regards you as a resident until you change your domicile to another state. See "Change of Domicile" on page 10 of this CA tax publication for an explanation:
https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf
3) After you become a non-resident of CA, CA can still tax your CA-source income. Income such as vacation pay and severance pay is considered CA-source income if it was earned by work performed in CA.
4) A capital gain from the sale of property located in CA is taxable by CA. If the home you sold was your principal residence for 2 of the 5 years leading up to the date of sale, you would qualify for a capital gains exclusion according to IRS rules.
#1 - CA
#2 - depends if you established residency in WA - lease / home ? driviers license? voter's regtrations card? etc?
#3 - see #2
#4 - why are you moving to WA - was it for convenience or did you find a job that required you to be in WA???
Thank you for answer
regarding your question
#2: buying/leasing home. Actually permanent move to WA
#4: My wife will find work in WA and I am retiring.
1) ALL your income while still a CA resident is taxable by CA.
2) For tax purposes, CA regards you as a resident until you change your domicile to another state. See "Change of Domicile" on page 10 of this CA tax publication for an explanation:
https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf
3) After you become a non-resident of CA, CA can still tax your CA-source income. Income such as vacation pay and severance pay is considered CA-source income if it was earned by work performed in CA.
4) A capital gain from the sale of property located in CA is taxable by CA. If the home you sold was your principal residence for 2 of the 5 years leading up to the date of sale, you would qualify for a capital gains exclusion according to IRS rules.