Married filing separately for CA and WA State

 

 

1. Can we file separately for WA and CA State tax returns? It can be done but not easily due to the community property rules. You really need to talk to a local tax pro since WA doesn't have a state income tax and  both states  have community property rules which can be very tricky to navigate for the first time.
2. If we can, what are the steps I need to take to move my CA residency to WA?  Residency is set up by changing your DL and voter's registration among other things ... check the rules for WA.
3. Is there any waiting period for CA resident to be released from CA State Income Tax?  There is no "period" per se ... it all depends on the residency. 

To cease being a CA resident for state tax purposes, you must change your domicile to the new state.  See "Change of Domicile" on page 10 of this CA tax publication to see what that entails:

 https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf

 

Once you've changed your domicile to WA, CA can only tax your California-source income.  Some examples of CA-source income would be rental income from a property located in CA or W-2 income from work actually (physically) performed within CA.

 

If you are both WA residents for 2023, and if your wife has CA-source income in 2023, and since CA and WA are both community property states, CA's rule in that situation is that you must use the same filing status on your non-resident CA return that you use on your federal return.  

 

There is no tax return to file for WA because WA does not have a state income tax.