Moving out of CA

[candycanepanda1]

I own a property in California and am planning to move to another state soon. I intend to rent out my California property, and a property management company will handle the rental.

Given that I’ll be living out of state, I’m wondering if I can still claim California residency for tax purposes. Also, I want to know if there’s any way to avoid or reduce the 7% nonresident withholding tax on rental income from California.

Any guidance on this would be greatly appreciated!

[TomD8]

"Given that I’ll be living out of state, I’m wondering if I can still claim California residency for tax purposes."

Your residency for tax purposes isn't something you "claim"; it's a matter of state law.  If you abandon your domicile (your main, primary home) in California, and establish a new domicile in another state, then for state tax purposes you become a non-resident of California and subject to CA's rules for non-residents.  You can have only one domicile state at a time.

This CA tax publication details CA's rules on determining residency:

https://www.ftb.ca.gov/forms/2024/2024-1031-publication.pdf

[candycanepanda1]

Thank you so much for your response!

I was wondering if there’s any way to work around the 7% non-resident withholding tax? Is there any exemption or alternative that would apply to my situation? I’d really appreciate any guidance you can offer.

Thanks again!

[TomD8]

@candycanepanda1 --

If you qualify, you can request a waiver of the withholding requirement by submitting California Form 588.  Here's a link to that form:

2024, Form 588 Nonresident Withholding Waiver Request

Here's a link to the form's instructions:

https://www.ftb.ca.gov/forms/2024/2024-588-instructions.html