I retired from the State of California end of November 2020, and moved to New Mexico on Jan. 1, 2021. I got paid for my unused vacation in 2021 and therefore received a W-2 from the State where federal and CA state taxes were withheld, therefore I filed a Nonresident CA tax return. Since I have been receiving pension from CalPERS (California Retirement System) and Social Security starting in 2021, I should be reporting these income in the NM state tax return, correct? When I responded on the residency status question in the NM tax return on Turbo Tax, as a NM resident, it showed an amount that I owe since no state taxes were withheld from these 2 sources of income. However, when I responded as a first-year resident (which we were since we moved here permanently in 2021), it showed we don't own any taxes. I'm conflicted which is the correct residency status response.
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Yes, CalPERS (California Retirement System) and Social Security, which started in 2021, should be reported on the NM state tax return. You would be classified as a first-year resident of New Mexico.
You are a first-year resident if both the following are true:
* You moved to New Mexico during 2021 with the intent of making New Mexico your permanent place of residence.
* You are still in New Mexico on December 31, 2021.
I have been a full time retired resident of New Mexico for 10 years. On my current state of New Mexico tax return it is using the federal AGI within the return to determine taxes owed. In this years return, I am being charged a state income tax when I did not have any income from the state or within the state. My only income is from a CALPERS retirement system in California along with my Social Security. Is this correct? Seems like double taxation.
NM taxes the net income of every resident. If you live in NM then all your income unless specifically exempted from NM state taxes is taxable income. If another state taxed you on the same income then you would claim a credit on your NM return for taxes paid to another state in the Credits section of your NM return.
After entering your income forms and deductions in the federal interview, you would complete the non-resident state return before completing your NM resident return. You would note the double taxed income and the tax imposed by the other state and use those numbers to claim the NM credit.
Here is a list of income that is not taxable by NM from the NM form PIT-1 instructions. TurboTax automatically applies these exemptions as you answer questions and make entries in the Federal and then NM state interviews.
• You have interest and dividend income on New Mexico state and local bonds.
• You have a New Mexico net operating loss carryover.
• You have interest income from U.S. Government obligations.
• You have Railroad Retirement income not taxable by New Mexico.
• You have Railroad Unemployment Insurance Act sick pay.You, your spouse, or both are members of an Indian nation, tribe, or pueblo and your income was wholly earned on the lands of the reservation or pueblo of which the individual is an enrolled member while domiciled on that reservation, tribe, or pueblo.
• You, your spouse, or both are age 100 or over and not dependents of another taxpayer.
• You, your spouse, or both are age 65 or over or blind, and your adjusted gross income is not over $51,000 for a joint return; $28,500 for a single taxpayer; or $25,500 for married taxpayers filing separately.
• You have federally taxable contributions to or distributions from a New Mexico Medical Care Savings account. • You contribute to a New Mexico-approved Section 529 college savings plan.
• You have net capital gains for which you can claim a deduction of up to$1,000 or 40% of your net capital gains, whichever is greater.
• You have United States armed forces wages or salary from active duty service.
• You, your spouse, or both are age 65 or over, and you have unreimbursed or uncompensated medical care expenses of $28,000 or more for yourself, your spouse, or dependents.
• You, your spouse, or dependents have expenses related to donating human organs for transfer to another person.
• You received a reimbursement from the New Mexico National Guard servicemember’s life insurance reimbursement fund.
• You were required to include in your federal adjusted gross income taxable refunds, credits, or offsets of state and local income tax (see federal Schedule 1, line 1).
• You are a non-resident, United States Public Health Services (USPHS) servicemember, and you earned income in New Mexico for USPHS active duty pay.
10 Years?? Those CALPERS retirement $$ are NOT CA-taxable. Pensions/Retirment income is taxable ONLY by the state you are living in when you receive the $$.
Yu shouldn't be filing a CA non-resident tax return for those CALPERS $$ received. IF CALPERS is withholding CA taxes, you need to call them and get that stopped by whatever means they require.....if they haven't been withholding CA taxes, then there is no need to file CA at all for those $$.
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Of course, if you still own some property in CA that you rent to others there, have royalty payments from a CA property, or a spouse living there while you live in NM....then yeah, a CA nonresident tax return might be required...but otherwise...nope....the CALPERS retirement $$ are only taxable by NM.
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