Non Resident Estimated Taxes

[st11x]

Hi,

I live in Nevada and starting 2021, I am working as a contractor remotely for a company in California.  All my work is remote and I do not have to travel to the state.

I also have other local 1099 income.  In 2022, I am expecting a 1099 from the California company, so I am thinking California will want me to pay state taxes on that income?

If so, then do I now I have to pay estimated state taxes to California this year? I have no income from California in 2020, so this is the first year I have to deal with this. If I have to pay, how do I work out what to pay them? 

thanks

  Matt  

[MaryK4]

Yes, you will definitely want to pay estimated tax to California in 2021.  Your 2021 California tax will only be applied to the income you earn in California.  

Use the California Estimated Tax Worksheet in the Instructions for Form 540-ES to calculate your estimated tax.  See Estimated tax payments for more information.

Estimated tax is the tax you expect to owe for the current tax year after subtracting:

• Credits you plan to take
• Tax you expect to have withheld

[st11x]

Thank you for the reply. 

The worksheet lists dates for 2020, but the rest of the information should still be relevant. 

There is this part in the worksheet that I highlighted. Does this mean I don't have to make estimated payments for this time since I didn't owe California any taxes in 2020? 

Thanks

  Matt

[MaryK4]

Yes, you do not HAVE to make the estimated tax payments.  There would be no penalty for 2021 because you were not a resident in 2020 so California does not have a prior year tax amount to compare.  Technically, you will be assessed the penalty, but qualify for one of the exceptions so there will be no penalty.  

@st11x