I lived in one state but my employer withheld taxes for another state

[amadrid]

I moved from California to Hawaii at the end of 2018 but continued to work remotely for my employer throughout 2019. My employer withheld California taxes throughout the year but I wasn't living there. How do I file my taxes? Do I have have to file non-resident income for the state of California? What about Hawaii income taxes?

[JotikaT2 · Accepted solution]

You will need to file a nonresident return for California and a resident return for Hawaii.

California taxes nonresidents on all income earned from California sources..

Hawaii taxes residents on all sources of income.  However, you will be able to claim a credit in Hawaii for taxes paid to California.  This ensures you are not taxed on the same income twice.

In the "My Info" section of TurboTax located in the black panel on the left, confirm that you have entered the correct state information: 

1. Click "Edit" to the right of your name 
2. Confirm your input under #2 "Tell us the state(s) you lived in" 
3. Do the same for your spouse if you are married filing jointly. 
4. Go back to the personal information section, and verify the mailing address and "Other state income" section.  Be sure to answer yes to the question asking "Did you make money in any other states?" and enter California. 

Review your input under the wages section of the Income & Expenses section.  Be sure you have listed the state and income tax withholdings as reported on your W-2 form(s).

This will then allow you to enter your state returns for the nonresident state as well as the resident state. 

Please note the following as it will affect the calculations: 

When you are preparing more than one state return, make sure you prepare the Nonresident California state tax returns first.   Be sure to answer the questions correctly to ensure only income sourced to California is reported here.

Once you have entered all of the nonresident state information, then start your Hawaii return.  This will ensure you receive any credits for taxes on income which may have been taxed in both states. 

Proceed through the screens in your Hawaii return until you see Take a look at Hawaii credits and taxes. You should see Taxes Paid to Another State under the Credit for Taxes paid.   You can edit your information here if needed but the taxes paid to the other states should be listed in this section.