Moved from CA to WA in August of 2022 - Division of income amongst states

[rahulrg86]

I moved from CA to WA in August, and trying to understand how to determine the exact amounts earned in CA vs WA. 

1. The reason why this amount isn't very straightforward is because I am unsure how to treat RSUs, signing bonus, etc. that partially vested in CA before I moved to WA 

2. Do I just utilize box 16 and report that amount? Are there any adjustments I need to make to it?

Thanks in advance!

[SundayInSalem]

Generally, your Restricted Stock is taxable to California on the date the stock vests because it is tied to work you performed in California. Check with your former employer, but your RSUs are probably already included in California wages in W-2, Box 16.

California says:

If you perform services for a corporation entirely within California but the stock vests after you terminate employment and become a non-resident, the income attributable [is] the difference between the fair market value of the stock on the vesting date and the price you paid for the stock [that] has a source in California, the location where you performed the services.

Example

On February 1, 2011, while a California resident, you purchase stock from your employer that was subject to substantial risk of forfeiture for a 3-year period. You performed all of your services in California from February 1, 2011, to December 31, 2013, the date you left the company and permanently moved to Wyoming. On February 1, 2014, your stock vested.

Determination:

The difference between the fair market value of the stock on February 1, 2014, and the price you paid for the restricted stock on February 1, 2011, is characterized as compensation for services having a source in California, the state where you performed all of your services.

See: Nonresident of California on Vesting Date in Publication 1004

Signing Bonus

Signing bonuses depend on the terms of your agreement. However, if you received the entire bonus as a lump sum while a California resident (and didn’t have to pay anything back when moving to Washington), it’s probably all California income.

California says:

If services must be performed to receive or keep the signing bonuses and if any of those services are performed or partially performed in California, then the signing bonus is included in the compensation to be allocated within and without California.

See: Cal. Code Regs. Tit. 18, § 18662-6 - Nonresident Withholding, Entertainers, Athletes, and Speakers

H/T: Pay to Play? How States Handle Signing Bonuses for Athletes

[rahulrg86]

Thanks for sharing! Rather than perform all of these calculations - Can I just utilize the information available in box 16 of my w2 (state tax) and use that amount in my filing?

[MaryK4]

No you cannot use the Box 16 amount because that only represents the current year allocation.  With income that is "earned" or attributed to more than one year has to be calculated pro rata.  

@rahlrg86