Hi
Am trying to resolve an issue with many moving parts ... any insight would be great !
I left a company I was working for in NJ in Dec 2019 (was a resident there). As part of that voluntary separation, I was told I would receive a separation pay In Jan 2020, I moved to CA (just me, while my spouse stayed in NJ) to join a new job. In Feb 2020, I received the severance pay as a single lumpsum (W-2 shows that taxes on that severance package were paid in NJ, not in CA : likely because company was based there ).
I was wondering if this would also need to be reported and taxed in the CA filing or just the NJ filing ?
Some other details : my spouse, who was non-earning during 2020 also relocated to CA after a few months (we sold our house in NJ and moved everything to CA)
"I was wondering if this would also need to be reported and taxed in the CA filing or just the NJ filing ?"
You must report the income on your CA as well as your NJ return. CA taxes its residents on "ALL income, including income from sources outside California." However, you'll be able to claim a credit on your CA return for the taxes paid to NJ, so you won't be double-taxed.
See page 6, https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf
"I was wondering if this would also need to be reported and taxed in the CA filing or just the NJ filing ?"
You must report the income on your CA as well as your NJ return. CA taxes its residents on "ALL income, including income from sources outside California." However, you'll be able to claim a credit on your CA return for the taxes paid to NJ, so you won't be double-taxed.
See page 6, https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf